South Korean crypto exchange Bithumb announced today that it will fully compensate customers affected by an incident in which 620,000 Bitcoins worth more than $40 billion were mistakenly distributed to 695 users during an event reward payout.
The error occurred on February 6 when an entry error during the rewards process resulted in a massive overpayment. Bithumb said it detected the problem within 20 minutes and blocked all transactions and withdrawals.
Bithumb recovered almost all of the overpaid Bitcoin, 618,212 BTC, or 99.7% of the total. Additionally, 93% of assets already sold by recipients have been recovered, and no coins have been sent outside the platform.
“We sincerely apologize for the confusion and inconvenience caused to our customers due to the overpayment incident,” Lee Jae-won, CEO of Bithumb, said in a statement. “We feel a deep sense of responsibility for failing to meet the main priorities of a virtual asset exchange: stability and integrity.”
Bithumb confirmed that customer losses due to panic selling during the incident amounted to approximately 1 billion Korean won (over $680,000) as of February 7. The company will provide 110% compensation to customers who sold at unfavorable prices on Friday.
All customers who accessed the platform during the incident will receive 20,000 KRW ($15) and trading fees will be waived for seven days.
The exchange also announced a permanent customer protection fund worth 100 billion Korean won ($68 million) to deal with future incidents.
The Financial Supervisory Service and the Financial Services Commission are investigating Bithumb following the error.
The company said it was working with regulators after reporting the matter to authorities and would implement system upgrades such as enhanced asset verification, multi-step payment approvals and AI-based backup for abnormal transaction detection around the clock.