The Great Bitcoin Blunder: Bithumb’s Whopping Legal Showdown

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In the curious kingdom of coins, Bithumb, a bustling beast of a crypto exchange, has decided to scuttle into the courts to freeze nearly $500,000 worth of Bitcoin that wandered off after a monstrous payout goof-the $40 billion blunder in February.

Bithumb Launches Legal Action

On Thursday, the chatterbox Chosun Biz whispered that the South Korean crypto exchange Bithumb had begun legal proceedings to recover part of the Bitcoin that simply refused to return after the silly, spoilt bit of luck.

On February 6, Bithumb bungled a payout and handed out 620,000 BTC, worth over $40 billion, to 249 users in the exchange’s “random box” promotion thanks to a fat-finger fiasco.

The exchange quickly slammed on the brakes and recovered most of the loot. However, some customers scooted off, sold, or swapped the BTC for cash or other coins, leaving about 0.3% of the Bitcoin unrecovered.

According to the report, Bithumb filed for a provisional seizure this week to reclaim 7 Bitcoin it had failed to recover after the misfire. This is a polite little legal measure to temporarily freeze a debtor’s assets, preventing their hiding or disposal before a proper lawsuit to reclaim the money is filed.

Legal wizards reckon that customers who did not return the mistakenly paid Bitcoin would likely lose the lawsuit. Head of the Financial Supervisory Service (FSS) and a former attorney, Lee Chan-jin, has said those customers are “clearly subject to the return of unjust enrichment. Those who sold and converted them into money (cash out) face disaster (as they could be dragged into lawsuits).”

An industry source told Chosun Biz that some clients argued they should not be responsible for the exchange’s blunder, but under South Korean law, mistakenly received assets are usually classified as unjust enrichment and must be returned in kind.

The report noted that if BTC’s price falls by the time of return, the customer could benefit, but if the price surges, the customer could face losses if the court rules in the exchange’s favor.

The Ghost Bitcoin Goblin: A Blunder That Shook the Exchange

Although 99.7% of the BTC were recovered, the incident raised serious concerns about the crypto exchange’s internal controls. As Bitcoinist reported, Bithumb held 175 BTC in its own books and less than 50,000 BTC between its own assets and customer-held assets at the time of the incident.

This meant that Bithumb’s system failed to block the irregular transaction, distributing assets that did not actually exist and distorting market prices. As a result, the FSS, alongside the Korean Financial Intelligence Unit (KoFIU) and the Digital Asset eXchange Alliance (DAXA), formed an emergency task force to organize follow-up measures and review industry-wide practices, including domestic exchanges’ virtual asset reserves, management practices, operational conditions, and internal control systems.

In March, the KoFIU preliminarily notified Bithumb of a six-month partial suspension of its business for alleged violations of Anti-Money Laundering (AML) and Know-Your-Customer (KYC) regulations.

Earlier this week, the Financial Services Commission (FSC) found that domestic crypto exchanges’ trade-halting systems, also known as kill switches, are unreliable when a massive asset mismatch occurs.

Therefore, the regulator ordered all domestic crypto exchanges to switch from the 24‑hour reconciliation cycles most exchanges currently have to a 5‑minute asset‑matching regime by the end of May. In addition, they asked all platforms to disclose their asset-matching balance daily.

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2026-04-10 07:12