SEOUL, South Korea — South Korean cryptocurrency exchange Bithumb said it will reimburse users who incurred losses after an internal error led to the accidental transfer of 620,000 bitcoins to customers participating in a promotional event, triggering panic selling and a brief price drop.
The incident occurred around 7 p.m. on Friday, when Bithumb mistakenly transferred 620,000 bitcoins to 249 users, an average of about 2,490 bitcoins per user, worth roughly 244 billion won, or about $166 million, each. Some recipients sold the bitcoin they received, causing a sharp but short-lived decline in prices on the exchange.
Bithumb said it will fully compensate affected customers for losses linked to panic selling and provide an additional 10 percent compensation. The exchange also announced it will waive trading fees on all listed assets for one week starting at midnight Monday.
The company said it has activated a companywide crisis management system led by senior executives and formed a dedicated task force to address investor losses and prevent a recurrence.
According to Bithumb, it recovered 618,212 of the mistakenly transferred bitcoins and later recouped about 93 percent of the 1,788 bitcoins sold by users. Transactions and withdrawals from affected user accounts were halted at 7:40 p.m., but the exchange said it was unable to recover 125 bitcoins.
The error was traced to a mistake by an employee who entered the payment unit as “BTC” instead of “Korean won” while processing rewards for the promotional event.
Bithumb estimated total customer losses from the erroneous transfer at around 1 billion won. The exchange said it identified cases where users sold the bitcoin under unfavorable market conditions and confirmed it would cover the full price difference, along with an extra 10 percent bonus.
Chief Executive Officer Lee Jae-won apologized for the incident and said the company would take full responsibility. South Korea’s Financial Supervisory Service is expected to review the exchange’s response measures and examine the possibility of fully recovering the remaining mistakenly transferred bitcoins. (Source: IANS)
