Bithumb $43 Billion Bitcoin Blunder Triggers Political Backlash In South Korea
South Korean lawmakers are ramping up strain on monetary regulators after a system failure at Bithumb, the nation’s largest cryptocurrency alternate, led to the unintended distribution of greater than $43 billion price of Bitcoin (BTC) earlier this month.
The February 6 incident has triggered political scrutiny of each the alternate itself and the businesses liable for overseeing the digital asset market.
Behind The Bithumb Massive Bitcoin Mishap
According to native reporting by The Korea Times, members of the National Assembly are questioning how such an enormous error may slip by means of regardless of repeated regulatory inspections.
Rep. Kang Min-guk of the principle opposition People Power Party disclosed that the nation’s Financial Services Commission (FSC) reviewed Bithumb thrice between 2022 and 2025.
Over the identical interval, the Financial Supervisory Service (FSS) performed three separate inspections. Yet regulators did not detect what has now been described as a essential structural weak point within the exchange’s system.
Kang argued that current oversight mechanisms had been insufficient. He identified that safeguards had been inadequate to stop a scenario by which a single worker may provoke huge coin transfers. Kang stated:
The episode is just not merely a technical mishap however a case that lays naked deeper structural weaknesses within the digital asset market, together with complacent supervision and gaps in regulation.
Instead of crediting customers with Bitcoin price 2,000 gained — roughly $1.38 — the system mistakenly credited 2,000 Bitcoin per consumer. In whole, 620,000 Bitcoin had been incorrectly distributed.
Rep. Han Chang-min of the minor Social Democratic Party additionally criticized regulators, questioning whether or not supervisory authorities had meaningfully evaluated the alternate’s inner programs. “Authorities seemed to be shifting accountability onto Bithumb regardless of their supervisory function,” Han stated.
Broader Crypto Oversight
In response to the incident, the FSS prolonged the deadline for its formal investigation from Feb. 13 to the top of the month, citing the necessity for extra time.
An eight-member inspection staff is now intensifying its overview, specializing in doable violations associated to investor safety and anti-money laundering (AML) compliance.
Particular consideration is being given to the system structure that allowed cash not really held by the alternate to be credited to customers. Regulators haven’t dominated out the likelihood that additional inaccurate distributions may very well be uncovered.
Separately, monetary authorities have reportedly fashioned an emergency response staff in coordination with the Digital Asset eXchange Alliance (DAXA), a self-regulatory physique representing domestic exchanges.
The staff has begun inspections of asset verification and inner management programs at 4 different platforms — Upbit, Coinone, Korbit, and GOPAX. Any deficiencies are anticipated to be integrated into DAXA’s self-regulatory pointers and will affect the following part of cryptocurrency laws in South Korea.
At the time of writing, Bitcoin was buying and selling at $67,763, marking a 2% decline over the previous seven days and exhibiting minimal change since Thursday’s buying and selling session.
Featured picture from OpenArt, chart from TradingView.com