The crypto community is reeling from Bithumb’s colossal blunder, now under intense regulatory scrutiny in South Korea. In a promo gone horribly wrong, the exchange credited 249 users with 620,000 Bitcoins worth 60 trillion won ($41.2 billion), igniting a firestorm of trades and questions about operational integrity.
FSS regulators notified Bithumb Monday after an earlier raid, signaling a no-holds-barred investigation. Industry insiders call it a ‘nightmare scenario,’ with authorities vowing crackdowns on systemic flaws.
The glitch hit Friday: a meant-to-be 620,000 won giveaway morphed into a Bitcoin bonanza. Panic selling ensued; 1,788 BTC slipped away despite hasty reversals. Bithumb’s statement acknowledged swift recovery efforts but couldn’t undo the sales.
Central to the issue is the book-entry trading model—internal accounting sans blockchain stamps—that can spawn deceptive ‘phantom balances.’ Bithumb’s reserves? A mere 42,000 BTC as of September’s end, almost entirely custodial.
With crypto bills in parliament, this incident fuels calls for overhaul. FSS pledges stringent fines, IT fortifications, and consumer protections. Bithumb’s predicament may well force a reckoning, pushing exchanges toward blockchain-native transparency and resilience in Korea’s crypto frontier.