A clerical mistake at South Korea’s largest cryptocurrency exchange, Bithumb, triggered a dramatic but short-lived market shock on Friday evening when the platform accidentally credited 620,000 bitcoins to prize winners instead of 620,000 won. The error—apparently a confusion between the unit for South Korean won and the word “bitcoin” during a promotional payout—meant 695 accounts briefly showed at least 2,000 BTC each. Recipients began selling immediately, driving a 17% intraday fall in the exchange’s Bitcoin price and a substantial spike in trading volume.
Bithumb says the problem was detected within 20 minutes and that it froze trading and withdrawals for affected accounts within 35 minutes of the mistake. The company announced it has recovered 99.7% of the mistakenly credited coins, will compensate customers who suffered “forced panic selling” by covering their shortfalls plus a 10% bonus, and will use corporate assets to plug any remaining gaps. Chief executive Lee Jae-won apologised and acknowledged the breach of the exchange’s core obligations of stability and integrity.
The episode compounded already weak sentiment across crypto markets. Bitcoin briefly fell from roughly 67,200 USD to about 55,400 USD on Bithumb before stabilising; elsewhere prices fell and liquidations surged. CoinGlass data cited in contemporaneous reports recorded more than 110,000 margin liquidations in 24 hours, with total liquidated positions exceeding $400m. The incident is being discussed alongside a broader correction that has seen Bitcoin fall more than 40% from the record highs posted last autumn.
South Korean regulators moved quickly to denounce the lapse and to promise scrutiny. The Financial Services Commission (FSC) said the incident exposed vulnerabilities in virtual-asset operations and announced an immediate review of exchanges’ internal controls and custody practices, with possible on-site inspections if irregularities are found. The regulatory response signals heightened supervision for a sector that domestic authorities have already been trying to rein in after previous hacks, frauds and operational failures.
Operationally, the Bithumb mistake is a textbook case of how human error can cascade into market-wide instability where concentrated liquidity and automated trading amplify the impact. The rapid selling by newly credited accounts collided with thin order books and algorithmic orderflow, producing outsized price moves in minutes. For users, the episode is a reminder that centralised exchanges remain a counterparty with operational and credit risk; for the market, it underscores how fragile intraday liquidity can be during stress.
Beyond immediate losses, the fallout will reverberate through market structure and regulation. Expect tougher minimum standards for internal controls, proof-of-reserves routines, segregation of duties and withdrawal limits during promotional credits. The reputational damage to Bithumb could accelerate client outflows to other platforms or to self-custody solutions, and the incident will strengthen the hand of regulators arguing for more intrusive oversight of crypto intermediaries.