Bithumb, a cryptocurrency exchange based in South Korea, has revealed that it inadvertently distributed approximately $44 billion worth of bitcoin to users as part of a promotional campaign. This error led to a significant downturn in trading activity on the platform.
As reported by Reuters, Bithumb disclosed that the incident occurred on a recent Friday when it intended to provide small promotional incentives to users, typically valued at a minimum of 2,000 Korean won (equivalent to around $1.40). Instead, a large number of customers received a minimum of 2,000 bitcoins each.
Upon realizing the mistake, the company swiftly took action by recovering 99.7 percent of the 620,000 bitcoins involved. Within just 35 minutes, they identified the error, halted trading and withdrawals for affected accounts, and managed to address the issue. A total of 695 customers were impacted by this distribution mishap.
In an official statement, Bithumb reassured its users that the incident was not a result of a cyberattack or security breach. The exchange emphasized that there were no underlying security flaws in its system or in the management of customer assets. However, South Korea’s financial authorities cautioned that the incident highlighted broader risks within the virtual asset market.
While Bithumb maintained that no hacking or security breaches occurred, regulatory bodies such as the Korean Financial Services Commission noted that the incident exposed weaknesses in the handling of virtual assets.
Following the distribution error, the price of bitcoin on Bithumb experienced a significant drop of up to 17 percent on Friday evening, falling to 81.1 million won before eventually rebounding. Subsequently, the cryptocurrency was trading at approximately 104.5 million won.
This incident serves as a reminder of the importance of robust security measures and risk management practices in the cryptocurrency industry.
