Bithumb has filed for a court-approved asset freeze to recover 7 BTC, worth approximately $496,000, from users who have refused to return funds two months after the exchange’s catastrophic payout error.
The legal action marks the final unresolved chapter of one of the largest accidental Bitcoin distributions in exchange history.
Bithumb $43 Billion Bitcoin Error: What Actually Happened
On February 6, a Bithumb employee running a “Random Box” promotional event entered the wrong currency unit. Instead of distributing 2,000 Korean won, roughly $1.37, to each winner, the system sent 2,000 BTC to 695 users simultaneously.
In minutes, Bithumb’s internal ledger showed 620,000 BTC credited to user accounts.
None of it was real Bitcoin. It existed only as numbers in a database. But some users didn’t wait to find out – they sold immediately. Bitcoin’s price on Bithumb crashed 17% to $55,000 while global prices barely moved.
Accounts were frozen within 35 minutes. By the end of the day, 99.7% had been reversed.
“The fact that a single error in setting an event reward unit can destabilize an entire crypto exchange demonstrates the current state of our systems,” Bithumb’s Exchange Business Division Vice President Hwang Seung-wook wrote in an internal email.
Also Read: Is Bitcoin Being Manipulated by Market Insiders?
Bithumb Fined After Regulatory Failures Exposed
Recovery wasn’t the end of it. South Korea’s FSS, FSC and FIU all launched investigations. CEO Lee Jae-won told parliament: “We are acutely aware of the deficiency in internal system control.”
Lawmakers revealed regulators had inspected Bithumb three times between 2022 and 2025, and missed every structural warning sign.
Three weeks ago, the FIU fined Bithumb $24.6 million for 6.65 million AML violations and suspended new-user registration for six months.
The incident has also cost Bithumb its near-term growth ambitions – the exchange has delayed its planned US IPO to 2028 as a direct result of the fallout.
Is Your Crypto Safe on a Centralised Exchange?
The 7 BTC court filing isn’t really about $496,000. It’s about whether users who knowingly kept funds from an obvious glitch face legal consequences – a question South Korean courts are now being asked to answer for the first time.
South Korea’s Supreme Court ruled in January that Bitcoin held on exchanges can be treated as property subject to seizure. That ruling now has its first real test case.
What the Bithumb incident exposed is something the industry rarely discusses openly: exchange balances aren’t Bitcoin. They’re entries in a private ledger.
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