The Financial Services Commission (FSC) convened an emergency meeting at the Government Complex Seoul, chaired by Vice Chairman Kwon Dae-young, with officials from the Financial Supervisory Service (FSS), the Korea Financial Intelligence Unit (FIU) and industry representatives. Bithumb Chief Executive Lee Jae-won attended the session.
Kwon said the incident exposed the vulnerabilities and risks inherent in virtual assets, calling for a rigorous assessment of user losses and close monitoring of Bithumb’s compensation efforts. Regulators also formed an emergency task force with the FIU, FSS and the Digital Asset Exchange Alliance, or DAXA, to oversee follow-up measures.
The task force will conduct on-site inspections at Bithumb and extend reviews to other exchanges, examining asset custody practices and internal control systems. Any illegal activity uncovered during the process will prompt immediate formal investigations, authorities said. Officials are also considering upgrades to monitoring systems to allow real-time oversight of exchanges’ asset holdings.
The FSC said it would link the response to ongoing efforts to draft the second phase of Korea’s virtual asset legislation, including proposals to mandate regular third-party audits of crypto holdings and impose strict liability on exchanges for customer losses caused by system failures.
Earlier in the day, the FSS dispatched an inspection team to Bithumb’s headquarters to examine the cause of the accident, user protection measures and the feasibility of recovering misallocated assets.
According to industry sources, the incident occurred during a promotional “random box” event on Friday evening, when a staff member mistakenly entered “BTC” instead of “Korean won” as the payment unit. As a result, rewards totaling 620,000 won intended for 249 users were erroneously paid out as 620,000 bitcoins.
The exchange said it immediately suspended transactions and withdrawals on affected accounts at around 7:40 p.m. and began recovery efforts. Bithumb reported that it had recovered 618,212 bitcoins and reclaimed about 93 percent of the remaining coins sold by users, leaving roughly 125 bitcoins unrecovered.
The sudden inflow of coins led some users to sell aggressively, briefly dragging down the bitcoin price on the platform.
Compensation and reforms
Bithumb estimates customer losses linked to the incident at around 1 billion won ($750,000).
In a statement, CEO Lee acknowledged that panic selling during the price dip had caused unfavorable trades for some users.
The company said it will compensate affected investors by refunding their full trading losses plus an additional 10 percent. Users who sold bitcoin at depressed prices between 7:30 p.m. and 7:45 p.m. will receive automatic payouts within a week after data verification.
All customers logged into the platform during the incident will also receive 20,000 won in compensation. In addition, Bithumb plans to waive trading fees across all markets for one week following a separate announcement.
To strengthen safeguards, the exchange said it will establish a 100 billion won customer protection fund and implement a series of reforms, including enhanced asset verification systems, reinforced multi-level approval procedures, improved AI-based abnormal transaction detection, and regular external audits.
“I sincerely apologize and take full responsibility,” Lee said. “We will do everything necessary to ensure that no customer suffers losses.”
Financial authorities said the case underscores the need for stricter oversight as crypto assets become more embedded in the financial system. The FSS will continue to examine whether Bithumb’s response adequately protected users and whether a full recovery of the misallocated bitcoins is feasible.
The incident is likely to accelerate regulatory efforts to tighten controls on exchanges and reinforce accountability, as policymakers seek to prevent similar disruptions in the fast-growing digital asset market.
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