Share
South Korea’s parliament hauled Bithumb’s chief executive into a public hearing this week after a human error briefly injected tens of billions of dollars’ worth of “ghost Bitcoin” into the market. The episode did not stem from hacking or market manipulation. It came from something simpler, and more troubling for regulators: an internal process that allowed nonexistent assets to be credited, traded, and partially withdrawn.
During a promotional event on February 6, 2026, an employee processed customer rewards in Bitcoin instead of Korean won. The intended payout totaled about $423. The mistake sent roughly 620,000 BTC to hundreds of users, implying a value of more than $40 billion at prevailing prices. Trading halted within minutes as customers rushed to sell. Bithumb began freezing accounts and clawing back funds soon after.
2026 and this still happens. 🤯
A Bithumb employee meant to airdrop a token… sent 2,000 $BTC instead.
Hundreds of users got it.
BTC on Bithumb nuked -10% vs other markets.One typo.
Billions in damage. pic.twitter.com/USmOlSw4bG— Wise Advice (@wiseadvicesumit) February 6, 2026
At Wednesday’s hearing, lawmakers focused less on the technical slip and more on what it revealed. Min Byeong-deok, a member of the ruling Democratic Party, said the exchange had effectively distributed assets it did not own, likening the incident to naked short selling. Opposition lawmaker Kim Sanghoon questioned, how basic currency-code safeguards failed inside one of the country’s largest exchanges.
CEO Lee Jae-won apologized in opening remarks and pledged tighter oversight. The exchange later said it recovered more than 90% of the mistaken transfers and restricted trading and withdrawals for affected users within 35 minutes. Even so, regulators made clear that speed alone does not resolve the deeper issue.
The Financial Supervisory Service launched on-site inspections and signaled that findings will feed into broader reforms. Vice Chairman Kwon Dae-young told lawmakers the case exposed risks tied to virtual assets and weaknesses in internal control systems. An emergency task force now plans inspections across all domestic exchanges.
That response reflects the scale of crypto’s role in South Korea. At times in 2024 and 2025, trading on local platforms surpassed volumes on the Kospi and Kosdaq. When operational errors reach market scale, officials see a threat to household investors, not just a single firm.
Bithumb still seeks the return of about $9 million in Bitcoin that some users sold or transferred. Regulators warned that failing to repay could trigger criminal proceedings under unjust enrichment rules. Legal precedent complicates that stance. In a 2021 Supreme Court ruling, judges held that cryptocurrencies did not qualify as “property” for certain breach-of-trust charges, a decision lawyers say could limit criminal enforcement today.
Authorities argue the market has changed since 2021. The current probe will inform the second phase of crypto legislation, with a focus on controls that prevent “virtual data” from becoming tradable assets.
This was not a speculative blow-up or a cyberattack. It was an accounting failure that briefly became real liquidity. For lawmakers, that distinction sharpens the policy question you should care about: if internal controls can mint tradable value by mistake, who bears the loss when the system corrects itself?
Bithumb’s error forced regulators to confront that question in public. The answer will shape how South Korea treats operational risk in crypto markets going forward.
Share
