Bithumb Bitcoin Blunder: $1.3B Error Sparks Probe Into Weak Financial Oversight
South Korea’s monetary authorities are dealing with criticism after failing to identify main flaws in Bithumb’s techniques that led to an unprecedented Bitcoin error.
Despite repeated inspections by the Financial Services Commission (FSC) and the Financial Supervisory Service (FSS), a vulnerability remained that allowed a single worker to set off huge coin transfers with out detection.
Bithumb Crypto Mishap
According to Rep. Kang Min-guk of the People Power Party, the FSC reviewed Bithumb as soon as in 2022 and twice in 2025, whereas the FSS carried out three inspections throughout the identical interval. Despite this, none recognized discrepancies between precise holdings and accounting data.
On February 6, a promotional occasion went improper when customers had been mistakenly credited with 2,000 BTC every as an alternative of cash price 2,000 gained (price roughly $1.38). This error triggered the system to register a complete of 620,000 bitcoins being “distributed” to customers, which is way over the change’s precise holdings of about 42,800 BTC.
As reported by The Korea Times, the nation’s lawmakers said the error exposes deeper weaknesses in inside controls, ledger administration, and regulatory supervision. Rep. Han Chang-min of the Social Democratic Party questioned whether or not regulators’ inspections had been largely procedural and famous makes an attempt to position duty on Bithumb.
The FSS has prolonged its probe by way of February and is investigating potential violations involving investor safety, anti-money laundering (AML), and system flaws.
Bithumb CEO Lee Jae-won acknowledged two smaller prior errors that had been recovered, which the FSS will even assessment.
Meanwhile, an emergency crew from the authorities and the Digital Asset eXchange Alliance (DAXA) is reviewing asset verification and inside controls at a number of the nation’s different distinguished exchanges, reminiscent of Upbit, Coinone, Korbit, and GOPAX. Results are anticipated to affect each DAXA’s self-regulatory guidelines and future crypto laws.
Lost and Found
The newest setback comes a month after the Gwangju District Prosecutors’ Office reported that Bitcoin seized in a legal case had gone lacking, however authorities have now recovered all 40 billion gained price of the misplaced cryptocurrency. Prosecutors said the 320.8 bitcoins had been returned from the hacker’s digital pockets to the workplace’s pockets on February 17, apparently voluntarily, after the hacker was unable to money them out.
The cash had initially been confiscated from the daughter of a pair arrested for working an unlawful abroad playing web site price 390 billion gained between 2018 and 2021, who had transformed their legal proceeds into Bitcoin. Officials mentioned the BTC had been misplaced final August when prosecutors unintentionally accessed a phishing web site whereas checking the pockets, which uncovered the funds.
Authorities have been monitoring the hacker and monitoring home and worldwide exchanges to forestall additional losses.
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