Bithumb Error Triggers Bitcoin Crash, Attracts Regulatory Attention

Bitcoin prices on South Korea’s Bithumb exchange fell sharply on February 6 after a major error during a promotional airdrop. As reported, the exchange mistakenly sent a large amount of Bitcoin to hundreds of users. 

Some of them quickly sold the coin, further pushing prices down on the platform.  Although the drop did not last long, it forced Bithumb to act fast and attracted the attention of financial regulators.

Bithumb Mistake Triggers Bitcoin Price Crash

The incident began during a promotional campaign on Bithumb. An employee was meant to distribute prizes worth 2,000 Korean won to selected users. Instead, the employee mistakenly selected Bitcoin as the reward. As a result, the system sent about 2,000 Bitcoin to each of the 695 users who won the promotion.

This error led to the release of roughly 620,000 Bitcoin into user accounts within minutes. Some recipients quickly sold the coins, creating intense selling pressure on the exchange. The sudden sell-off caused the Bitcoin price on Bithumb to fall sharply. 

The BTC to Korean won price dropped to around $55,000, far below prices on other global exchanges. Meanwhile, Bitcoin continued to trade above $66,000 on most international platforms. Although the crash started on Bithumb, the shock briefly affected broader market sentiment and added to existing volatility in the crypto market.

Bithumb Acts Fast as Regulators Step In After Error

Bithumb identified the error within minutes and moved quickly to limit the damage. The exchange blocked the affected accounts and stopped further trading linked to the mistaken transfers. It also recovered almost all of the Bitcoin that was wrongly distributed.

The company confirmed that customer assets remained safe and that normal trading resumed shortly after. At the same time, South Korea’s Financial Services Commission confirmed it had begun reviewing the incident. 

The vice chairman of the commission, Kwon Dae Young, described the incident as a clear example of the risks present in virtual asset markets. He ordered a full assessment of user damage and instructed regulators to closely monitor Bithumb’s compensation process.

Bithumb Apologizes, Promises Full Compensation as Bitcoin Rebounds

Following the news, Bithumb’s CEO, Lee Jae Won, issued a public apology and outlined the compensation plan in detail. The exchange announced it would fully compensate users who suffered losses due to the price crash. The exchange plans to use its own corporate funds to cover any gap and restore all affected balances. 

After Bithumb completed its immediate corrective actions, Bitcoin prices on the exchange rebounded strongly. At the time of writing, Bitcoin is trading at about $68,800, reflecting a gain of more than 5% over the previous 24 hours, according to CoinMarketCap data. 

Other major cryptocurrencies also recorded strong gains. Ethereum (ETH) climbed almost 7% and moved above $2,000. XRP jumped more than 9%, while Solana (SOL) rose over 7%. Analysts at Galaxy Research and Bitwise say the market may be nearing the end of its price correction.