South Korea’s Financial Supervisory Service (FSS) has escalated its routine inspection of the Bithumb exchange to a full-scale investigation. The trigger was an incident involving the erroneous crediting of 620,000 BTC (approximately $43.1 billion) to users, reports Yonhap.
A representative of the regulator told the news agency that the authority will take stringent measures against any actions undermining market order.
The glitch occurred on February 6 during a promotional event. An employee of the platform confused tickers and entered bitcoin as the reward unit instead of Korean won.
The amount credited far exceeded the exchange’s actual reserves. At the time of the incident, Bithumb held only about 46,000 BTC in its wallets.
Following the event, the bitcoin-to-won exchange rate on the platform plummeted by 15%.
Representatives of the exchange reported the return of 99.7% of the mistakenly distributed assets. Approximately 125 BTC could not be recovered.
The company promised to compensate affected clients 110% of their losses and to strengthen internal control systems. Additionally, Bithumb will establish a user protection fund amounting to 100 billion won ($68 million).
Political Repercussions
The incident drew sharp criticism from lawmakers. Legislator Na Kyung-won noted that the situation exposed the issue of trading “non-existent assets.”
“If an exchange merely changes numbers in its internal ledger without actual movement of funds on the blockchain, it signifies the sale of bitcoins it does not own. This situation poses a risk of market collapse,” she stated.
South Korea’s ruling Democratic Party announced plans to limit the share of individual shareholders in crypto exchanges to 15-20%. Previously, the industry opposed this initiative, fearing it would slow market growth.
Financial authorities are also discussing the introduction of legal responsibilities for crypto platforms similar to those required of traditional financial institutions.
Back in 2024, the former CEO of Bithumb Holdings, the exchange’s parent company, An Sunghyun, was found guilty of fraud. In 2025, law enforcement continued investigative actions against the former director of the platform, Kim Dae-sik.