Epic blunder: South Korean exchange accidentally sent out $44 billion worth of Bitcoin

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South Korean cryptocurrency exchange Bithumb mistakenly issued Bitcoin worth over $44 billion to users due to operational errors, causing the price of platform tokens to plummet. Regulators have initiated a review process.

The incident occurred on Friday. Bithumb originally planned to distribute a cash promotional reward of 2,000 Korean won (about $1.4) per user, but a system error resulted in at least 2,000 Bitcoins being sent to each of 695 users. The exchange restricted trading and withdrawal functions for the affected accounts within 35 minutes, and has recovered 99.7% of the mistakenly issued Bitcoin.

The accident directly impacted market confidence. The price of Bitcoin on the Bithumb platform plummeted 17% to 81.1 million Korean won on Friday night before rebounding somewhat, with the latest trading price at 104.5 million Korean won.

After holding an emergency meeting, regulatory bodies such as the Korean Financial Services Commission stated that this incident "exposed the vulnerability and risks of virtual assets", and will launch a review of Bithumb and other cryptocurrency exchanges' internal control systems, asset holdings, and operations. On discovering violations, onsite inspections will be initiated.

Technical Error Causes Massive Coin Distribution Mistake

According to Reuters, Bithumb attributed the incident to an internal operational error. The exchange emphasized in a statement: "We want to make it clear that this event has nothing to do with external hacking or security vulnerabilities, and there are no issues with system security or customer asset management."

Based on current Bitcoin prices, Bithumb mistakenly issued a total of 620,000 Bitcoins, valued at about $44 billion. The original promotion was designed to reward each user with a small cash bonus of not less than 2,000 Korean won, but during execution, the unit was mistakenly switched from won to Bitcoin, causing the reward amount to increase by billions of times.

After discovering the error, the exchange acted quickly, freezing the affected accounts' trading and withdrawal permissions within 35 minutes. So far, 99.7% of the mistakenly issued Bitcoin has been recovered, but about 0.3% remains unrecovered, which is estimated to be worth about $132 million.

Comprehensive Regulatory Review Upgraded

South Korea's financial regulatory agencies responded rapidly to the incident. After an emergency meeting, the Financial Services Commission issued a statement saying the event revealed systemic risks in the virtual asset industry.

Regulators plan to conduct a comprehensive review of cryptocurrency exchanges' internal control systems, virtual asset holdings, and operational processes. If violations or management loopholes are found during the review, on-site inspections will be immediately initiated. This marks a possible further strengthening of regulation over South Korea’s cryptocurrency industry.

Bithumb is the second largest cryptocurrency exchange in South Korea, second only to market leader Upbit. This incident may prompt regulators to re-evaluate risk management standards and technical system reliability requirements for the entire industry.

Risk Warning and DisclaimerThe market involves risks; investment requires caution. This article does not constitute personal investment advice, nor does it take into account individual users' specific investment objectives, financial conditions, or needs. Users should consider whether any opinions, viewpoints, or conclusions in this article fit their particular situation. Investment based on this article is at your own risk. ```