Authorities in South Korea have launched a formal review after a high-profile Bithumb bitcoin glitch exposed serious weaknesses in a major crypto promotion.
The $40 billion promotion error at Bithumb
South Korean regulators are examining how Bithumb, one of the country’s leading exchanges, initiated an exchange of $40 billion in Bitcoin that it apparently did not hold on its books. The anomaly has raised concerns over internal controls at large trading platforms.
The issue surfaced when the Seoul-based exchange, during a promotional campaign, began crediting accounts with vast sums instead of the modest reward that had been announced. However, no actual transfer of on-chain coins matching that scale has been reported so far, intensifying questions about the internal accounting.
How the crypto exchange promotion mistake unfolded
According to the Financial Services Commission, the incident occurred on Feb. 6 when Bithumb started crediting user balances with a “small fortune” of Bitcoin. Each participant should have received only 2,000 won, equivalent to $1.37, under the terms of the campaign.
In its financial services commission statement on Sunday, the regulator said the problem stemmed from a single employee inputting the payout field as Bitcoin rather than Korean won. Moreover, this internal error cascaded through the exchange’s systems and led to what officials have described as a ghost bitcoin incident in user interfaces.
Regulatory response and industrywide scrutiny
In response, South Korean authorities have formed a dedicated task force to conduct a regulatory task force investigation into industry practices. The team is examining whether other domestic trading platforms could be vulnerable to similar lapses in configuration or oversight.
The new group will look closely at how exchanges manage promotional campaigns, verify reward limits, and reconcile internal ledgers. That said, the episode has already become a central focus of the ongoing south korea crypto probe, which aims to tighten risk controls in the retail trading environment.
Focus on Bithumb bitcoin systems and controls
Regulators are now assessing whether the bithumb bitcoin accounting architecture provided adequate safeguards against manual input errors of this scale. However, the authorities have not yet indicated whether formal sanctions will follow once the fact-finding process concludes.
Investigators are also gathering information on how quickly Bithumb identified the problem, whether user access to the inflated balances was restricted in time, and how the platform communicated the issue. Moreover, findings from this case could inform new guidance for all major crypto venues in Seoul.
Implications for South Korea’s crypto sector
The Bithumb case has renewed debate over how tightly exchanges should be supervised in one of Asia’s most active digital asset markets. While some industry participants warn against overregulation, officials argue that errors involving tens of billions of dollars, even if only virtual entries, can undermine public confidence.
For now, South Korean regulators are signaling that they will treat this as a structural warning rather than an isolated mishap. The outcome of the investigation is expected to shape the next phase of policy toward large trading platforms and their promotional activity.
In summary, the Bithumb promotion error has become a catalyst for wider oversight of crypto exchanges in South Korea, with the $40 billion accounting glitch prompting authorities to scrutinize internal controls, user protection, and future risk management standards across the sector.