South Korean company attempting to recover losses after giving out S$55 billion in bitcoin to customers
A South Korean crypto firm accidentally sent 620,000 bitcoin, worth around US$44 billion (S$55.6 billion), to 249 customers.
The company responded quickly and recovered most of the lost money, but around 86 customers had quickly sold their newly-obtained bitcoin.
Source: Jiri Hera on Canva, for illustration purposes only
South Korean crypto firm gives 2,000 bitcoin reward instead of 2,000 won
South Korean company Bithumb made the crypto blunder on the evening of 6 Feb.
According to The Korea Herald, Bithumb intended to give away small cash rewards to customers in a promotional event.
The company wanted to give each winner 2,000 won (S$1.70) but accidentally gave at least 2,000 bitcoin per winner instead.
Source: Bitcoin News on X
After sending out the 620,000 bitcoin, Bithumb allegedly halted the transactions within minutes.
The company managed to quickly recover 618,212 bitcoin, or about 99.7%.
In that short window, however, some customers had already sold 1,788 bitcoin, causing a drop in prices as much as 17%.
Source: Bithumb
Over S$11 million in bitcoin sold and unrecovered
Bithumb managed to recover 93% of the sold bitcoin, reported Korea JoongAng Daily.
That ultimately left 126 bitcoin, worth around US$8.9 million (S$11.2 million), sold and unrecovered as of 7 Feb.
Bithumb has begun contacting the involved customer to regain the sold bitcoin and is even considering legal action.
However, some questioned whether legal action could be taken against these customers.
In 2021, the South Korean Supreme Court ruled that cryptocurrencies did not qualify as property under the Criminal Act, resulting in an acquittal in an embezzlement case.
Other law experts stated that the customers who sold the bitcoin could still be taken to court over breach of trust.
Bithumb promises compensation of S$17 to users
“We would like to make it clear that this incident is unrelated to external hacking or security breaches, and there are no problems with system security or customer asset management,” Bithumb stated.
Source: Yonhap News via The Korea Herald
The Korea Herald reported that Bithumb did not actually hold 620,000 bitcoin, with an estimated reserve of only 43,000.
It had thus credited non-existent “ghost” bitcoins to its customers, raising concerns about the security of the cryptocurrency exchange.
Bithumb pledged to fully reimburse customers who sold at depressed prices with the price difference plus an additional 10%.
All users logged into the platform at the time of the incident will receive 20,000 won (S$17).
Also read: Man refuses to return S$9K mistakenly transferred by NTU, spends it on a staycation
Man refuses to return S$9K mistakenly transferred by NTU, spends it on a staycation
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Featured image adapted from Jiri Hera on Canva, for illustration purposes only, and Yonhap News via The Korea Herald.
