A major South Korean cryptocurrency exchange erroneously created billions in phantom Bitcoin. Specifically, Bithumb distributed 620,000 ghost units due to a critical staff error. Consequently, this severe failure of ledger integrity triggered an immediate local price crash.
An employee mistakenly designated a promotional reward in Bitcoin, not won. As a result, the error transformed a marketing event into a $42 billion blunder. Fortunately, Bithumb detected the widespread ledger discrepancy within twenty minutes. Subsequently, the exchange halted withdrawals and trading on all affected accounts.
Nevertheless, some recipients sold the credited assets before full controls activated. Therefore, Bitcoin’s price on Bithumb plunged by up to 18 percent. Meanwhile, broader global Bitcoin markets remained completely unaffected by the incident. Following the sell-off, the exchange began a major recovery operation.
The platform successfully recovered about 99.7 percent of the misallocated assets. However, approximately 1,786 Bitcoin were sold during the brief window. Moreover, industry analysts estimate that 3 billion won ultimately left the platform. Ultimately, this episode reveals a profound question about ledger integrity on crypto platforms.
For context, customer deposits totaled only about 42,600 Bitcoin before the error. In fact, exchanges primarily operate through internal book-entry systems for efficiency. Thus, these systems can temporarily display balances far exceeding actual custody. Similarly, critics quickly likened the incident to a bank issuing worthless checks.
In response, Bithumb strongly rejected allegations of balance manipulation. Instead, the company asserts that customer assets remain safely segregated. Additionally, all compensation for affected users will come from company capital. Furthermore, financial authorities have now launched urgent on-site inspections.
Regulators include the Financial Services Commission and the Financial Supervisory Service. Accordingly, these agencies may pursue a formal investigation and potential sanctions. Conversely, a suspension of business operations remains a possible regulatory outcome. Indeed, the event has reignited serious concerns about exchange trust.
This specific failure of ledger integrity underscores a critical structural vulnerability. Moreover, the gap between internal accounting and real asset custody is now a clear focus. Looking ahead, the industry will likely face intensified scrutiny over its core practices. Finally, Bithumb’s recovery efforts will set a crucial precedent for the entire sector.
