South Korean cryptocurrency exchange Bithumb has filed a request with a local court to freeze seven Bitcoin, currently valued at approximately $8 million. The move is part of an ongoing effort to recover funds lost during a system error this past February.
The incident occurred on February 6. According to the exchange, an employee preparing a promotional campaign accidentally entered Bitcoin (BTC) as the unit of account instead of South Korean Won (KRW). This error resulted in the system distributing a total of approximately 620,000 BTC to 249 winning users, with a paper value that briefly exceeded $40 billion.
Due to a system vulnerability, some users were able to quickly sell off approximately 1,788 BTC before Bithumb could freeze their accounts. This triggered significant volatility in the platform's BTC/KRW trading pair, causing the price to temporarily dip into the 80 million KRW (roughly $54,000) range.
Legal Recovery Efforts
Bithumb acted quickly to reverse most of the erroneous transactions and successfully recovered the vast majority of the assets that had been sold. However, approximately 12.3 billion KRW (about $8.3 million) remains unrecovered. Following months of negotiations, only seven Bitcoin have yet to be returned.
According to local media reports, Bithumb has initiated provisional seizure proceedings—a necessary step to prevent debtors from moving assets before formal litigation begins. The case is expected to move into civil court proceedings shortly.
Legal experts in South Korea note that such incidents are classic cases of "unjust enrichment." Under local law, recipients are legally obligated to return funds or assets sent in error. If the assets have already been liquidated, users may be required to repurchase the Bitcoin at current market prices to settle their debts.
This incident highlights the inherent risks of cryptocurrency trading, where human error meets the irreversible nature of blockchain transactions. As South Korea's second-largest cryptocurrency exchange, Bithumb currently handles an average daily trading volume of approximately $388 million, trailing only the market leader, Upbit.