South Korean cryptocurrency exchange Bithumb has admitted that internal system flaws caused it to send out bitcoin worth about $40 billion to customers by mistake. The company is now trying to explain how such a vast error happened and to reassure Users that their own funds and the wider market are safe.
The incident has turned a technical glitch into a global test of trust for digital-asset trading platforms. It serves as a stress test not only of Bithumb’s controls but also of how mature the Bitcoin market has become when a single error can briefly put tens of billions of dollars in play.
How a routine promotion spiraled into a $40 billion mistake
The chain of events began with what was meant to be a simple marketing push. Bithumb planned to hand out small cash-style rewards to active traders, a common tactic on crypto exchanges to boost volumes. Instead of sending modest bonuses, the internal System treated the giveaway as if it were a full transfer of bitcoin, so customer accounts were suddenly credited with enormous amounts of the asset that added up to about $40 billion at current prices, according to $40 billion estimates.
On Saturday, the error hit live trading and Users began to see balances that did not match reality. Some tried to move or cash out the unexpected windfall, turning a back-office bug into a market event. One detailed account described how the South Korean platform, identified as a Crypto Firm Accidentally Sends out $44 Billion in Bitcoin, flooded accounts with what looked like real funds worth $44 Billion, prompting frantic attempts to trade or withdraw before the mistake could be reversed $44 Billion.
Inside Bithumb’s flawed internal controls
Bithumb has now said the root cause was not a hack but its own weak internal controls. The company used special internal accounts to manage promotional giveaways, but those accounts were not properly separated from real customer balances, according to its own explanation of how Bithumb admits to a $40 billion bitcoin error due to internal system problems $40 billion bitcoin. When staff triggered the promotion, the system treated the move like a genuine transfer of assets, not a marketing credit.
The South Korean exchange’s CEO, identified as Le Jae in one account, has acknowledged that a lack of proper checks left its internal systems open to both human error and potential sabotage, with The South Korean operator admitting that most of the mistaken transfers have since been clawed back serious flaws. Another report on the South Korean platform’s explanation said Bithumb and its managers stressed that the crypto exchange did not lose its own holdings of 42,000 bitcoins, which suggests the glitch affected how balances were displayed and moved, not the underlying cold storage 42,000 bitcoins.
Regulators and lawmakers turn up the pressure
The size of the mistake has drawn fast attention from regulators and politicians in South Korea. Bithumb CEO Lee Jae-won has already been questioned at the National Assembly in western Seoul, where lawmakers pressed him on how the company allowed such a breakdown and what it will do for affected customers, according to a report that described how Bithumb CEO Lee Jae promised payback to users hit by the system mishap and answered questions at the National Assembly National Assembly. That hearing underlined the political stakes of a crypto error that briefly rivaled the market value of some blue-chip companies.
Regulators are also looking at how Bithumb’s policies compare with peers in other major markets. One analysis of the South Korean operator said its policy of checking large transfers after they happen, rather than blocking suspicious movements in advance, is far looser than standards seen in other major markets, and that this gap may have allowed the $40 billion error to play out in real time instead of being stopped at the gate $40 billion error. That reads as a warning sign for the wider industry, since many exchanges still rely on after-the-fact checks rather than strong pre-trade risk controls.
Customer fallout, recovery efforts and promises to pay back
For individual traders, the most pressing question is whether they will be forced to return gains or cover losses that stemmed from the glitch. Bithumb has tried to calm those fears by saying it will compensate Users who were harmed by the system mishap and that it will not punish customers who acted in good faith while the error was live, according to a detailed report on how Bithumb promises payback to users hit by system mishap and is working through account-by-account reviews payback to users. That stance matters because some traders saw their positions liquidated when the faulty credits were reversed.
The company has also stressed that it has already recovered almost all of the bitcoin it accidentally sent out. One account of the South Korean crypto firm said Bithumb has pulled back nearly the entire $44 billion in Bitcoin that was misdirected, after freezing some accounts and working with other platforms to halt onward transfers recovered almost all. Another description of the chaos detailed how the South Korean crypto exchange accidentally hands out $40B in Bitcoin and then scrambled to reverse the $40 billion at the time, a reminder that many Users briefly believed they had life-changing money in their accounts $40B in Bitcoin.
What the blunder reveals about crypto market maturity
Even as the dust settles, the episode has become a case study in how far crypto trading has come, and how far it still has to go. One detailed breakdown from South Korea described how Bithumb, a prominent exchange in South Korea, revealed that significant internal flaws led it to move the equivalent of 42,000 bitcoins, and that the market price of bitcoin barely budged in response South Korea’s Bithumb. That relative calm suggests deeper liquidity and more sophisticated arbitrage than in earlier boom-and-bust cycles.
At the same time, the story has fed public doubts about crypto’s plumbing. A BBC account of the S Korean crypto firm accidentally pays out $40bn in bitcoin said the Korean operator’s CEO Lee Jae-won admitted that simple human mistakes inside the company could trigger transfers on a scale that would be unthinkable at a traditional bank Korean crypto firm. Another summary of the saga, which framed it as a Bookmark of how a South Korean exchange like Bithumb accidentally transferred over $40 billion in assets, argued that such events will keep regulators on high alert and may speed up demands for bank-style controls at major platforms Bookmark report. That reads as a sign that crypto is now too big, and too intertwined with regular investors, to be allowed to run on fragile internal code.
There is also a lesson in how the story spread. One widely shared feature on Oops, South Korean crypto exchange accidentally hands out $40B in Bitcoin showed how quickly social media amplified tales of instant riches, even as Bithumb was already moving to freeze the mistaken funds and unwind trades Oops. Another analysis of the same Crypto Firm Accidentally Sends saga noted that Bithumb later stressed in a statement that it remains focused on safe asset management, a line clearly aimed at calming both Users and regulators after the shock asset management. The bigger takeaway is simple: if a single flawed promotion can briefly create $40 billion of phantom wealth, crypto platforms still have a lot of basic engineering and governance work to do before they can claim bank-level reliability.
