TL;DR
- Bithumb’s Feb. 6 promo glitch credited 2,000 BTC per user instead of 2,000 won, showing 620,000 BTC and a $43B paper error that sparked selling.
- Lawmakers say the FSC missed flaws despite three inspections since 2022; the Feb. 10 probe was extended toward end-February.
- Bithumb says most assets were recovered, leaving 125 BTC ($8.6M) unrecovered; officials cited 22 BTC missing in 2021 and 320 BTC lost then recovered in 2025.
South Korea’s regulators are facing a credibility test after Bithumb briefly credited customers with Bitcoin the exchange did not hold, a paper error valued around $43 billion. A promotion slip morphed into an oversight crisis when, during a Feb. 6 event, the platform reportedly credited 2,000 BTC per user instead of 2,000 won ($1.40), showing 620,000 BTC it did not possess and sparking a rush to sell. Lawmakers say the episode highlights structural weaknesses in a fast-growing market, and forces tough questions on safeguards. In fast markets, such accounting shocks ripple instantly through liquidity pools.
Probe delays and oversight questions
Political pressure intensified as the Financial Services Commission delayed its inspection, even after The Korea Times said the watchdog missed critical flaws despite at least three inspections since 2022. Regulatory timing became the new battleground: the FSC opened its investigation on Feb. 10, promised “stern legal actions” against acts that harm market order, and initially targeted Feb. 13 to conclude. Representative Kang Min-guk said it was more than a technical mishap, citing gaps in regulation and oversight. Officials extended the review toward end-February. Delays are fueling accusations that oversight is reactive, not proactive, amid growth.
Bithumb’s own disclosures are now central to the clean-up narrative and to the probe’s scope. Recovery metrics are the headline KPI for confidence. CEO Lee Jae-won told an emergency National Assembly session on Feb. 11 that two earlier mistaken payouts were minimal and later recovered, and the FSC review reportedly covers those cases too. For the Feb. 6 incident, Bithumb said it recovered most miscredited assets, leaving 125 BTC unrecovered, about $8.6 million, from the non-existent 620,000 BTC total. That gap between displayed balances and inventory is what lawmakers want regulators to stress-test forward now.
The controversy also revived concerns about how authorities handle seized and stored digital assets. A broader custody track record is amplifying scrutiny of enforcement capacity. The report cited a 2021 audit at Seoul’s Gangnam Police Station where 22 BTC, worth about $1.5 million at current prices, disappeared from a cold wallet. It also referenced an August 2025 case in which 320 BTC vanished from the Gwangju District Prosecutors’ Office, reportedly from a leaked password, then was recovered after the hacker returned funds. Authorities disclosed the recovery only recently, raising eyebrows. Lawmakers say oversight must tighten.
