Bithumb Issues Apology and 110% Compensation After BTC Distribution Mistake

South Korean crypto exchange Bithumb has issued a fresh apology after a major reward payment error on February 6. The incident led to a huge overpayment of Bitcoin to hundreds of users. The exchange said the mistake caused panic selling and short term price swings on its platform. Bithumb has now shared a compensation plan and promised to take full responsibility. The company said it has informed regulators. It is also cooperating with the investigation.

How the Overpayment Happened

The issue started during a small promotional reward event. Around 695 users were supposed to receive a reward of about 2,000 Korean won. But a data entry mistake caused a much larger payment. Some users received thousands of Bitcoin instead of the small reward.

The exchange said about 620,000 BTC was mistakenly sent out. The error was noticed within about 20 minutes. Soon after, Bithumb began blocking withdrawals and trades from the affected accounts. The blocking process finished within about 35 minutes. The sudden selling by some users caused a brief flash crash on the exchange. Bitcoin prices dropped quickly before returning to normal levels.

Most of the Bitcoin Already Recovered

Bithumb said it has recovered almost all the wrongly sent Bitcoin. Out of the 620,000 BTC about 618,212 BTC has already returned. This equals around 99.7% of the total. Some users had already sold part of the coins. The exchange said it managed to recover about 93% of those sold assets as well. Only about 125 BTC remains unrecovered at the moment.

The company stressed that this incident wasn’t caused by hacking. It said the mistake came from a simple input error during the reward process. Customer funds weren’t at risk and normal operations have resumed.

Compensation Plan for Affected Users

Bithumb said it will fully compensate users who were affected by the incident. The company estimates total customer losses at around 1 billion Korean won. Users who sold at low prices during the panic period will receive 110% compensation. This includes the full price difference plus an extra 10%. 

In addition, all users who were online during the incident will receive a payment of 20,000 won. The exchange will also offer zero trading fees for all users for seven days. On top of that, it plans to create a permanent customer protection fund worth 100 billion won to handle future incidents.

New Controls to Prevent Another Mistake

Bithumb said it will upgrade its internal control systems. It plans to improve asset checks and introduce stricter multi-step approval processes. The exchange will also use a new AI system to detect abnormal transactions in real time. Additionally, an external security firm will audit its systems. The results of that review will be share publicly. The CEO said the company will take full responsibility. Also, the company will focus on rebuilding customer trust after the mistake.

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