Bithumb races to contain ‘Bitcoin misallocation’ fallout with 100 billion won fund and 110% compensation

Source: Yonhap News Agency Virtual asset exchange Bithumb has decided to create a 100 billion won customer protection fund after a recent incident in which Bitcoin (BTC) was mistakenly paid out. It will also compensate users who suffered losses from selling at low prices during the incident by paying them 110% of the price difference. Financial authorities have characterized the case as a grave example exposing weaknesses in internal controls in the virtual asset market. They plan to push for institutional reforms, including introducing a no-fault liability rule for virtual asset service providers.
According to financial authorities and the virtual asset industry on the 8th, Bithumb mistakenly paid 2,000 Bitcoin, instead of the intended 2,000 won per person (up to 50,000 won), to 695 event participants at around 7:00 p. m. on the 6th. Based on market prices at the time, the mistaken payout was worth about 197 billion won.
The total misallocated amount reached about 620,000 Bitcoin, which translated into more than 60 trillion won at prevailing prices. Bithumb became aware of the situation at 7:20 p. m. , about 20 minutes after the incident occurred, and immediately moved to block withdrawals.
According to an announcement by the Financial Services Commission (FSC), as of 4:00 a. m. 7% of the misallocated amount, had been retrieved before being traded. Of the 1,786 Bitcoin that had already been sold on the market, about 93% was also recovered.
To prevent a collapse in trust following the incident, Bithumb promptly unveiled a compensation plan. Customers who sold at low prices due to a sharp price drop during the incident window will receive 110% of the difference between their sale price and the reference price. All users who accessed the platform during that period will receive compensation worth 20,000 won, and trading fees for all customers will be waived for one week.
As of 4:00 p. m. the previous day, Bithumb estimated potential customer losses at around 1 billion won.
The company said there was no direct loss of customer assets, but acknowledged that some trades executed during the incident window were concluded under unfavorable conditions due to the sudden price drop. The exchange also announced system overhauls to prevent a recurrence. Bithumb has drawn up measures centered on strengthening its asset verification system, mandating multi-step approval processes, and operating its artificial intelligence (AI)-based abnormal transaction detection system, Safe Guard, around the clock.
In particular, the company plans to set aside and permanently maintain a separate 100 billion won customer protection fund so it can respond immediately to similar incidents in the future. Financial authorities also view the incident as stemming from inadequate internal control systems at virtual asset exchanges and have signaled strong follow-up measures. Based on the results of an emergency review meeting held the previous day and chaired by FSC Vice Chairman Kwon Dae-young, an emergency response task force was formed with participation from the FSC, the Financial Intelligence Unit (FIU), the Financial Supervisory Service (FSS), and the Digital Asset eXchange Alliance (DAXA).
Starting with Bithumb, the emergency response task force plans to inspect the asset holdings, operations, and internal control systems of major virtual asset exchanges, including Upbit, Coinone, Korbit, and GOPAX. If any violations are found, the authorities will immediately move to on-site inspections. In addition, in connection with the second-phase General Act on Digital Assets now being prepared, the authorities plan to legally strengthen user protection.
Key measures under review include requiring periodic asset audits by external institutions and explicitly stipulating no-fault liability for service providers in the event of IT system failures.
elikim@fnnews.com Kim Mi-hee Reporter