Bithumb, a cryptocurrency exchange based in South Korea, made an error by mistakenly distributing approximately $44 billion worth of bitcoin to customers during a promotional event. This mistake led to a significant sell-off on the exchange.
As reported by Reuters, Bithumb explained that the incident occurred on Friday when they had intended to provide small promotional rewards to users, usually valued at a minimum of 2,000 Korean won (around $1.40). Instead, a considerable number of customers ended up receiving at least 2,000 bitcoins each.
Upon realizing the error, the company swiftly took action by recovering 99.7 percent of the 620,000 bitcoins involved. They identified the mistake quickly and promptly restricted trading and withdrawals for affected accounts within just 35 minutes. About 695 customers were impacted by this distribution error.
In a reassuring statement, Bithumb clarified that the mistake was not a result of a cyberattack or security breach. They emphasized that their system security and the management of customer assets were not compromised. Despite this, South Korea’s financial authorities issued a warning, highlighting the broader risks present in the virtual asset market.
While Bithumb denied any hacking or security breaches, regulatory bodies like the Korean Financial Services Commission pointed out the vulnerabilities exposed in the handling of virtual assets due to this incident.
Following the mishap, the price of Bitcoin on Bithumb experienced a significant drop of up to 17 percent on Friday evening, plummeting to 81.1 million won before recovering. Subsequently, the cryptocurrency was trading at approximately 104.5 million won.