South Korean regulators and courts are moving to tighten oversight and clarify responsibility after a high-profile Bithumb payout error rattled confidence in local crypto markets.
Summary
Bithumb payout error leads to massive mistaken Bitcoin distribution
South Korean crypto exchange Bithumb has launched legal proceedings to recover 7 BTC still missing after a February promotional mishap that mistakenly distributed 620,000 BTC instead of cash rewards. The incident took place on Feb. 6 and briefly created a notional transfer worth roughly 62 trillion Korean won, or about $42 billion.
On that day, the platform planned to pay a total of 620,000 won (approximately $420) each to 249 winners of a marketing event. However, due to what the company described as an input error, the system sent out 620,000 Bitcoin instead of the intended fiat amount. Although Bithumb reversed the transactions within minutes, some recipients had already moved part of the coins.
After the mistake, the exchange said it recovered 99.7% of the mis-sent funds that same day. Moreover, Bithumb stated that the remaining 0.3%, equal to 1,788 BTC that had already been sold on the market, was covered using the company’s own reserves to protect users and preserve market stability.
Exchange turns to court-backed recovery measures
Bithumb has now filed for a provisional attachment, a court-approved mechanism that can freeze assets ahead of a civil lawsuit, targeting users who have not yet returned the Bitcoin. According to a Thursday report by local outlet Chosun Biz, the measure is aimed at a small group of participants who still hold or have profited from the mistaken transfer.
Since the February incident, the exchange has contacted affected users individually and has recovered most of the sold coins through negotiations. However, a limited number of recipients have refused to return the remaining 7 BTC, arguing that the funds arrived in their accounts due to the exchange’s mistake and that they are not responsible for sending them back.
Industry officials cited by Chosun Biz warned that those users may face unfavorable outcomes if the dispute moves forward in court. Under South Korean civil law, assets received by mistake are typically treated as unjust enrichment, which means they must be returned to the rightful owner. That said, the final ruling will depend on how judges interpret the specific circumstances and evidence.
The ongoing case over the bithumb payout error also raises broader questions about user obligations when they receive unintended transfers from centralized platforms. Moreover, it highlights the importance of rapid internal controls and reconciliation to prevent similar incidents from escalating into legal conflicts.
Cointelegraph contacted Bithumb for further comment on the status of the recovery process and the provisional attachment filings. However, the exchange did not provide an immediate response, leaving open questions about next steps, including the scope of potential civil claims.
Regulators react with stricter reconciliation requirements
Regulators in South Korea have also responded to the incident with new oversight rules for local trading platforms. Earlier this week, the country’s Financial Services Commission (FSC) ordered all domestic crypto exchanges to reconcile their internal ledgers with actual asset holdings every five minutes. The new mandate is designed to minimize delays in detecting discrepancies such as erroneous transfers.
According to the FSC’s inspection, three of South Korea’s five major exchanges had previously been reconciling balances only once per day. As a result, their ability to spot and correct significant accounting or payout errors in real time was limited. However, more frequent checks are expected to strengthen user protection and improve the resilience of the local trading infrastructure.
The Bithumb case is now seen as a key test for how courts and regulators handle large-scale operational failures at major crypto venues. Moreover, the outcome could shape best practices for exchanges worldwide, particularly around automated payout systems, ledger management and rapid response procedures when high-value mistakes occur.
In summary, Bithumb’s legal push to claw back 7 BTC and South Korea’s move to enforce five-minute reconciliations illustrate a tightening framework for centralized crypto exchanges. If the courts uphold the unjust enrichment principle in this context, users who benefit from clear operational errors may face stronger legal pressure to return funds in future incidents.
