A mistake at South Korean digital asset exchange Bithumb caused confusion and a sharp but short-lived drop in bitcoin prices this week.

During a promotional event, some users were accidentally given 2,000 bitcoin each, instead of a reward worth only about $1.40. The error happened during a routine reward payout.

Bithumb said the event was supposed to give users either points or a very small bitcoin reward worth 2,000 Korean won. However, a setting was entered incorrectly, resulting in the system treating the reward as 2,000 BTC, not 2,000 won.

Because of this mistake, hundreds of users suddenly saw extremely large bitcoin balances in their accounts. At current prices, 2,000 BTC is worth more than $130 million.

Bithumb issued a public apology and took responsibility for the mistake.

According to a statement by Bithumb, 620,000 BTC was incorrectly credited to the accounts of 695 people. That sums up to more than $40 billion.

Some users who received the mistaken bitcoin quickly tried to sell it. This caused a sudden sell-off on Bithumb’s bitcoin market. As a result, bitcoin prices on Bithumb dropped sharply.

At one point, bitcoin was trading at around 81 million won (about $55,000) on Bithumb. This was 10% to 22% lower than prices on other global exchanges.

“The bitcoin price temporarily fluctuated sharply as some accounts that received the bitcoin sold it,” Bithumb said in the statement.

The unusual price drop quickly caught attention on social media. Traders and researchers shared screenshots and claimed that the issue was linked to a “Random Box” promotional event.

Bithumb said its internal systems detected the abnormal transactions very quickly. According to the exchange’s official apology letter, the situation unfolded over about 40 minutes.

The rewards were sent at 7:00 PM local time. The error was discovered about 20 minutes later. By 7:40 PM, Bithumb had blocked trading and withdrawals on all affected accounts.
“As a result, market prices recovered to normal levels within five minutes,” the company said.

Bithumb added that its liquidation prevention system worked as intended and stopped the price drop from causing forced liquidations of other traders’ positions. Bithumb strongly emphasized that the incident was not caused by hacking. The exchange said:

The company also explained that the mistaken bitcoin never left its internal system. No bitcoin was sent on the blockchain, and customer wallets were not compromised.

“The external transfer of the mistakenly credited bitcoin did not occur,” the company said. The exchange said customer balances are fully backed and regularly audited by external accounting firms.

Bithumb said it recovered more than 99.7% of that amount by quickly freezing accounts.
About 1,788 BTC had already been sold before restrictions were applied. The exchange said it has recovered 93% of the assets linked to those sales and will use its own funds to cover any remaining amount.

Local media reported that around 3 billion won (about $2.1 million) was withdrawn after some users sold part of the bitcoin. It’s also reported that South Korean financial authorities are reviewing the incident.

“Given the massive scale of damage, we are treating this incident seriously and will thoroughly investigate the cause,” regulators said. They described the event as “serious” due to its size and impact, even though the disruption was brief and has been mostly resolved.