Bitcoin stays in focus as FSC/FSS probes Bithumb glitch

Reward miscrediting triggered Bithumb’s ‘phantom bitcoin’; controls under scrutiny

An internal rewards-accounting error at Bithumb miscredited bitcoin instead of won to user accounts, creating ‘phantom bitcoin’ balances and abnormal prints. The venue moved to reverse erroneous credits and stabilize trading.

As reported by Bloomberg, the platform mistakenly distributed about 620,000 BTC, roughly $40 billion, during a promotion. Transfers reached 249 accounts with oversized credits before emergency rollback procedures.

The operator has described the episode as a rewards miscrediting that cascaded into pricing dislocations and forced unwinds. The focus now is on how such an error cleared internal controls and change-management checkpoints.

Why it matters: FSC/FSS probes, CEX licensing risks, tougher standards

According to Seoul Economic Daily, the financial authorities convened an emergency meeting with the industry alliance after the glitch, signaling tighter scrutiny. That response included potential on-site inspections and broader checks on exchanges’ asset controls.

Regulatory leaders have begun outlining how the failure maps to licensing risks. “Structural weaknesses in virtual asset information systems could become licensing risks if left unaddressed,” said Lee Chan-jin, Governor of the Financial Supervisory Service.

The episode is being treated as a controls failure rather than external compromise, sharpening the focus on governance, IT safeguards, and incident response. For centralized exchanges, the bar may rise toward bank-like standards and stricter eligibility.

As reported by The Korea Times, the watchdog has commenced on-site reviews at Bithumb and is planning targeted probes across high‑risk operations. Findings are expected to feed directly into supervisory priorities.

Regulators have also telegraphed how this case informs the next legislative phase. “Second‑phase virtual asset legislation will include stronger liability and audit requirements for exchanges,” said Kwon Dae‑young, Vice Chairman of the Financial Services Commission.

Industry‑wide checks are expected to emphasize verified asset holdings, segregation of customer funds, and resilient IT governance. Exchanges with unresolved deficiencies could face sanctions or challenges to business eligibility.

As reported by The Investor, the on‑venue BTC price briefly fell about 15.8% during the glitch, underscoring market‑structure fragility when internal controls falter. Volatility around the venue normalized after stabilization measures.

What Phase 2 virtual asset law may change for exchanges

Audits, custody, and bank-like internal control standards for VASPs

Phase 2 is expected to formalize external audits of asset holdings and user‑fund management. Custody practices may move closer to bank‑style segregation, access controls, and reconciliation. Change‑management, dual controls, and incident reporting are likely to be codified. The objective is consistent, testable, and independently verified safeguards across VASPs.

Stricter liability for system errors and verified asset-holding requirements

Legal exposure could tighten toward strict liability when losses stem from systems or human error. Verified asset‑holding requirements (e.g., proof‑based attestations) may become recurring obligations. Exchanges may need documented remediation timelines after incidents, with enhanced reporting. Non‑compliance could trigger administrative penalties or licensing‑eligibility reviews.

FAQ about Bithumb phantom bitcoin

How are the FSC and FSS responding, are there on-site inspections and industry-wide probes underway?

Yes. On‑site reviews have begun and broader industry checks are moving forward following the incident.

Will this incident affect centralized exchanges’ licensing eligibility in South Korea?

Potentially. Weak internal controls and unremedied deficiencies could jeopardize licensing under Phase 2 expectations.