Bithumb promises payback to users hit by system mishap

Bithumb, Korea's second-largest crypto trader under fire for mistakenly sending out 620,000 Bitcoins to users, promised to compensate not only users whose tokens were liquidated due to the incident, but also those who sold their assets out of panic.

Bithumb CEO Lee Jae-won answers questions from lawmakers during a parliamentary hearing held at the National Assembly in western Seoul on Feb. 11, 2026. [NEWS1]

Bithumb, Korea's second-largest crypto trader under fire for mistakenly sending out 620,000 Bitcoins to users, promised to compensate not only users whose tokens were liquidated due to the incident, but also those who sold their assets out of panic.

"I sincerely apologize to the people who were deeply hurt by this erroneous payment incident, as the ultimate person in charge," Lee Jae-won, CEO of Bithumb, said during an audit by the National Assembly in western Seoul on Wednesday.

The questioning took place five days after Bithumb wrongly gave out 620,000 Bitcoins to users, instead of the 620,000-won ($430) monetary prizes that were supposed to have been handed out to winners of an internal event, at around 7 p.m. on Friday. The platform reportedly became aware of the incident at 7:20 p.m. and seized transactions for affected accounts at 7:35 p.m.

Bithumb only owned 175 tokens as of last year, and all coins entrusted to Bithumb just prior to the incident amounted to 42,619. The fact that 620,000 tokens were handed out, traded and cashed, all point to a serious error in Bithumb's fundamental flaws, according to critics.

"We are fully aware of our lack of internal control, especially regarding how we were able to raise the number of coins in our ledger system," Lee said. "We are also deeply regretful about our failure to detect and react to the anomaly swiftly."

Bithumb CEO Lee Jae-won bows his head down as he apologizes to lawmakers regarding his company's mistaken bitcoin token payout, during a parliamentary hearing held at the National Assembly in western Seoul on Feb. 11, 2026. [NEWS1]

Bithumb currently plans to compensate users who sold their tokens out of panic, when prices suddenly plunged with 1,788 additional tokens suddenly open in the market, as well as 30 users whose tokens were liquidated against their will during the incident.

"We are currently looking into more details of the incident, along with the Financial Supervisory Service [FSS]," Lee said. "We will review the complaints that we have been getting from the users and set a broad boundary for victims who need to be compensated."

Of the 620,000 Bitcoins mistakenly issued to 249 users, 618,212 — or 99.7 percent — were recovered before they could be sold or transferred. Even of the 1,788 Bitcoins that were sold or transferred, the exchange recovered 93 percent of them, leaving about 126 tokens — worth roughly 13 billion won in the wind as of Saturday.

Bithumb has begun contacting recipients individually to retrieve the assets. The company is considering legal action if recovery proves difficult.

During the audit, CEO Lee also admitted that Bithumb had two similar "yet very small" instances of mistaken payouts in the past. The company had changed its system afterward, but missed this latest mishap, according to Lee.

"We have been aiming to set an internal control system that is on par with financial companies. We promise to establish internal control, regulation and supervision up to the standards of financial services," said Lee.

Lee Chan-jin, chief of the Financial Supervisory Service, answers questions from lawmakers during a parliamentary hearing held at the National Assembly in western Seoul on Feb. 11, 2026. [YONHAP]

FSS chief Lee Chan-jin promised an overhaul of current policies to make sure that no such instances recur in the future. The FSS began formal investigations on Tuesday. The state agency will also review other major crypto exchanges on their internal and backup systems.

"Under the current system, only 80 percent of entrusted assets are kept separately, leaving 20 percent potentially exposed to risk," Lee said, referring to the "cold wallet" system, where the 80 percent of assets are mandated to be held in offline wallets that are separate from the internet.

"We will take into account other cases such as Europe’s MiCA [Markets in Crypto-Assets] regulation and comprehensively reexamine the issue in the second phase of legislation."

This article was originally written in Korean and translated by a bilingual reporter with the help of generative AI tools. It was then edited by a native English-speaking editor. All AI-assisted translations are reviewed and refined by our newsroom. BY YOON SO-YEON [yoon.soyeon@joongang.co.kr]