South Korean authorities under fire over $43B Bithumb Bitcoin error

South Korean lawmakers are stepping up unit connected fiscal regulators aft crypto speech Bithumb mistakenly credited customers with Bitcoin it did not hold, an mistake that concisely sparked a unreserved to merchantability and renewed questions astir oversight of the country’s fast-growing digital-asset market.

Lawmakers said the Financial Services Commission (FSC) failed to observe captious flaws successful Bithumb’s interior systems contempt astatine slightest 3 inspections since 2022, The Korea Times reported Thursday.

Representative Kang Min-guk of the main absorption People Power Party said the incidental is much than a method mishap, claiming structural weaknesses successful the crypto market, including gaps successful regularisation and oversight.

Bithumb mistakenly credited 2,000 Bitcoin (BTC) per idiosyncratic alternatively of 2,000 Korean won ($1.4) during a promotional lawsuit connected Feb. 6, distributing a full of 620,000 BTC that the speech did not really hold.

FSC delays probe into Bithumb, intensifying accusations

Lawmakers’ disapproval of the FSC intensified arsenic the regulator delayed its inspection of Bithumb. The authorization opened the probe connected Feb. 10, with FSC officials emphasizing they would instrumentality “stern ineligible actions against acts that harm the marketplace order.”

The probe, initially expected to reason past Friday, has present been extended, with officials aiming to implicit it by the extremity of February, citing the request for further review, aggregate section publications reported.

Bithumb CEO cites 2 anterior payout incidents

The FSC’s inspection of Bithumb reportedly covers not lone the caller 620,000 BTC error, but besides 2 akin incidents successful the past.

“There were 2 erstwhile cases successful which coins were mistakenly paid retired and aboriginal recovered, but the amounts were minimal,” Bithumb CEO Lee Jae-won said during an exigency National Assembly league connected Feb. 11.

From left: FSC vice president Kwon Dae-young, FSC politician Lee Chan-jin and Bithumb CEO Lee Jae-won during a National Assembly league connected Feb. 11. Source: The Korea Times

In the latest incident, Bithumb said it managed to retrieve the bulk of miscredited assets, with lone 125 BTC ($8.6 million) retired of the non-existent 620,000 BTC unrecovered.

Concerns implicit South Korea’s handling of crypto: The lawsuit of the disappearing Bitcoin

The Bithumb incidental besides lands arsenic authorities look renewed embarrassment implicit custody and information of seized integer assets.

In 2021, 22 BTC, worthy astir $1.5 cardinal astatine existent prices, disappeared from a acold wallet astatine Seoul’s Gangnam Police Station during a nationwide audit.

Related: Mirae Asset agrees to bargain 92% involvement successful Korean speech Korbit for $93M

A abstracted August 2025 lawsuit saw 320 BTC vanish from the Gwangju District Prosecutors’ Office, reportedly owed to a leaked password. Authorities lone reported yesterday that the full magnitude had been recovered aft the hacker returned the funds, raising eyebrows arsenic the disclosure comes amid the ongoing FSS probe into Bithumb.

Lawmakers and manufacture observers accidental these incidents underscore persistent weaknesses successful authorities’ oversight and custody of integer assets.

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