Earlier today, reports surfaced of a shocking clerical error at South Korean crypto exchange Bithumb regarding a promotional reward sent to some customers. According to some early accountsthe reward was supposed to be 2,000 Korean won, but users were sent 2,000 bitcoins instead. At current prices, this amounts to a roughly $140 million giveaway. That’s not good. But it was apparently worse.

Bithumb itself confirmed the error and showed that 620,000 bitcoins (worth $43 billion) were accidentally sent to 695 users. The amount was large enough to cause a temporary 10% drop in the price of bitcoin on the exchange, as some of the customers who received the filtered funds immediately sold them. According to Bithumb, further damage was avoided by limiting withdrawals and transactions for affected customers, and 99.7% of the erroneously sent bitcoins have been recovered.

“We would like to clarify that this matter is not related to external hacking or security breaches, and there are no system security or customer asset management problems,” reads a translated version of Bithumb’s post about the matter.

The large amount of bitcoin given to Bithumb customers also brings the concept of “paper bitcoin” to the fore, because the truth is that these exchanges do not need to have all the bitcoin to return the amounts shown to their respective customers. This issue is at the heart of the tragic collapse of early bitcoin exchange Mt. Gox in 2014which was the largest crypto exchange at the time. According to blockchain data provider Arkham IntelligenceBithumb has roughly $5.3 billion in assets, which is nowhere near the $43 billion it says it was wrongly given to some of its customers.

https://x.com/definalist/status/2019736545755120108

As pointed out by an X accountit is unbelievable that such a large amount of bitcoin could be mistakenly sent without any kind of precautionary measures. That said, it might not be surprising in the case of Bithumb, as the crypto exchange has been hacked at least three times since it was launched in 2014.

The first hack of 2017 includes compromise on an employee device with customer data on it, which was previously used to conduct phishing attacks on customers. Another hack happened in 2018, where approximately $30 million in crypto assets were stolen by the Lazarus Groupwhich is a hacking group with ties to North Korea. Perhaps most concerning in the context of today’s event, an additional $20 million was stolen from Bithumb in 2019, and the incident was initially believed to be an inside job.

It is important to note that no customers were affected by these hacks (apart from the leaks of personal information), with Bithumb covering the lost assets. That said, the exchange was also raided many occasions over the years for charges ranging from fraud to embezzlement. Indeed, Bithumb was raided again earlier this week of concerns related to false advertising and misleading promotional materials.

Bithumb said that no loss of customer funds occurred as a result of today’s incident, as there were possible liquidations for leveraged traders during the price movement that occurred as a result of falsely given bitcoin. This is the situation that happened recently with the so-called decentralized exchange Paradexwhich ended up using a centralized solution to rolling back trades that occurred during a pricing error.

This latest incident with Bithumb comes at a time when the crypto market as a whole is under stress, with Crypto asset prices have dropped dramatically from high October, and ethics-related concerns associated with The Trump family’s crypto businesses became a stronger political issue for administration. Jeffrey Epstein’s early investments and involvement in the crypto industry were also revealed in the latest batch of files released by the US Department of Justice, which led to Widespread speculation and Bitcoin conspiracy theories on social media.