Bithumb’s Bitcoin Blunder Puts Burden on Users as Legal Case Favors Civil Recovery
South Korean crypto exchange Bithumb mistakenly credited users with about $43 billion in Bitcoin during a promotional event on December 6, due to reward amounts being entered in BTC instead of Korean won. Most of the assets were quickly frozen or reversed, but some users managed to withdraw or sell their windfall before the error was contained. Bithumb is now contacting those users to recover the remaining funds, leveraging civil recovery laws, since there was no contract promising such large rewards. Criminal liability is unlikely unless it’s clear users knowingly exploited the error. The company has issued a compensation plan, with most funds already recovered and the rest covered by Bithumb. The incident has exposed gaps in regulatory oversight and internal controls within Korean crypto exchanges, prompting moves by policymakers to tighten regulations on ownership, proof-of-reserves, and internal controls. This episode is likely to accelerate legislative reforms under Korea’s ‘Virtual Asset User Protection Act’.
