Input error turned won rewards into 620,000 BTC; 99.7% recovered
Bithumb mistakenly issued 620,000 BTC to user accounts after a rewards configuration was entered in bitcoin rather than Korean won, with 99.7% reportedly recovered, as reported by Chosun Ilbo’s English edition. The erroneous airdrop briefly left some balances showing outsized holdings before controls were applied and reversals initiated.
The mis-credit occurred during a promotional payout workflow where a unit/denomination input was set incorrectly. The mistake propagated to customer balances and drove abnormal trading activity on the venue before containment steps took effect.
Why this matters: exchange internal controls and user protection gaps
The incident exposes a basic internal-control failure: payout systems for promotions were able to disburse assets without robust unit validation, maker–checker approval, or pre-disbursement reconciliation. Unlike traditional finance, several crypto venues still run marketing or event scripts outside hardened treasury workflows, increasing operational risk.
Before regulators spoke publicly, analysts underscored structural weaknesses spanning segregation of duties, withdrawal circuit breakers, and tested rollback procedures. “Major institutional reform is needed so virtual-asset exchanges establish internal control mechanisms similar to those in traditional finance,” said Lee Hyo-seop, Head of the Financial Industry Division at the Korea Capital Market Institute, as reported by Donga Ilbo.
Immediate impact: FSC/FSS probes, reimbursement steps, market dislocation
Financial regulators convened emergency meetings and ordered fact-finding on Bithumb’s internal controls, holdings, and user-protection processes, with on-site inspections prepared if breaches are found, as reported by Seoul Economic Daily. The review includes how a won-denominated reward became bitcoin, and whether effective recovery mechanisms and audit trails were in place.
Authorities have also signaled that compensation should cover verified losses, particularly trades executed during the temporary dislocation. Bithumb is expected to validate affected transactions and publish documentation standards so users can file claims supported by order and fill records.
Market-wise, bitcoin on Bithumb traded at a sharp discount to broader venues during the glitch, then converged as controls resumed and reversals proceeded. Liquidity conditions normalized after the incident window narrowed and erroneous credits were clawed back.
At the time of this writing, Coinbase Global (COIN) closed at 165.12 USD on Feb. 6, with after-hours at 165.86 USD, based on NasdaqGS delayed quotes. These figures are provided solely for contextual background on listed crypto-exchange equities.
How regulators may tighten crypto exchange oversight
Planned measures: external audits, strict liability, industry-wide inspections
Policymakers are weighing mandatory external audits of exchange-held virtual assets to verify balances against liabilities, according to Asia Economy. Proposals also include strict liability for non-malicious system errors that cause customer losses, alongside inspections expanded across all domestic virtual-asset exchanges.
These steps would align consumer protection closer to conventional financial standards, where treasury operations, promotions, and client assets fall under integrated control frameworks. If enacted, exchanges would face sharper accountability for engineering choices and operational testing around payouts and ledger adjustments.
Control checklist exchanges should adopt to prevent reward mis-credits
Exchanges should enforce unit and currency validation at every payout step, with a maker–checker workflow that separately confirms the asset type and notional before any ledger touch. Bounded limits for promotional disbursements, dry-run simulations in staging, and pre-disbursement reconciliations against provable reserves add further safeguards.
Operational kill switches and withdrawal circuit breakers should be tied to anomaly detection so off-market fills or sudden balance spikes pause transfers automatically. Exchanges also need tested rollback procedures with user notifications, post-incident root-cause reviews, and independent audit sign-offs to confirm remediation is complete.
FAQ about Bithumb 620,000 BTC airdrop error
How much has Bithumb actually recovered and what does the reported 99.7% recovery include?
Reports cite 99.7% recovery. As reported by 36Kr Europe, 618,212 BTC had been reclaimed from the mistaken 620,000 BTC, pending regulators’ verification.
Will affected users be compensated, and how can they verify and file claims for losses?
According to the Financial Services Commission, compensation must follow damage verification. Users should review Bithumb notices, confirm trade logs, and submit documented claims once the exchange opens its process.
| DISCLAIMER: The information on this website is provided as general market commentary and does not constitute investment advice. We encourage you to do your own research before investing. |
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