A serious transaction error in Bithumb, one of South Korea’s leading cryptocurrency exchanges, led to the temporary creation of “phantom Bitcoin” worth more than $43 billion in the exchange’s internal systems on February 6, 2026. The incident was brought to the agenda of the country’s financial authorities and the Financial Services Commission, and serious questions began regarding the surveillance practices on the sector.
620,000 BTC Created with a Single Error
This development occurred during a promotional campaign called “Random Box” organized by Bithumb. In the campaign in question, while it was planned to give rewards worth 2,000 Korean won to 695 users, an employee mistakenly entered “BTC” instead of “KRW” as the reward unit. Thus, 2,000 Bitcoins at their real value were reflected in each participant’s account.
The total amount accidentally distributed reached approximately 620,000 Bitcoins. At that time, the actual amount of Bitcoin held by Bithumb was limited to approximately 46,000. Although this error was limited to the balances in the stock exchange’s internal ledger, it caused a serious imbalance in the records.
Instant Fluctuation and Rapid Response in Markets
The resulting high balances caused some users to initiate sudden sales transactions. As a result, the Bitcoin price on Bithumb dropped by 15 to 17 percent in a very short time. Realizing what happened, the stock exchange management froze the relevant accounts within 35 minutes and tried to prevent the fluctuation in the market.
With the measures taken, most of the incorrectly reflected Bitcoin was taken back. The significant part of the loss was compensated by withdrawing the balance of approximately 618,212 Bitcoins, and the remaining amount of loss was stated to be around 125 Bitcoins. Bithumb announced that it will compensate 110 percent of verifiable user losses and created a 100 billion won hedge fund.
Audit Criticisms and Legal Regulation Agenda
This large-scale error raised questions over the country’s financial control systems. Following what happened, the South Korean Financial Supervisory Service turned its regular inspection process into a full-scale investigation. Authorities are investigating how a single manual entry could bypass protection mechanisms.
The incident brought the deficiencies in the internal control structure of the stock exchanges to the agenda in the parliament. Regulators have accelerated reform proposals regarding the Digital Asset Basic Law to prevent similar risks. Measures discussed include keeping the individual shareholding limit at 15 to 20 percent, introducing a double approval requirement for large asset movements, and strengthening internal approval processes.
“Paper Bitcoin” Discussions and Systemic Risks
The events brought to the agenda the issue of how assets that do not have a counterpart on the chain from outside the exchanges can cause financial imbalances in the accounting systems within the exchange. Industry representatives evaluate that the incident is not a problem directly caused by blockchain, but mainly due to centralized operational risks.
This development in South Korea once again highlighted how important infrastructure durability and internal audit procedures are in cryptocurrency exchanges. Authorities state that comprehensive changes may be made to stock exchange regulations depending on the results of the ongoing investigation.
