An "epic" blunder: Bithumb mistakenly sends 620,000 BTC

Written by: KarenZ, Foresight News

The crypto industry is never short of black swan events such as hacker attacks and lost private keys, but what happened on the evening of February 6, 2026, at Bithumb, South Korea's second-largest crypto exchange, is enough to be nailed to the annals of the most absurd blunder in crypto history, and can be called the "ceiling of exchange bewildering behavior".

On the evening of February 6th, Bithumb made a fatal operational error during the distribution of event rewards, mistakenly sending a total of approximately 620,000 bitcoins to 695 users. At the time, with bitcoins priced at $66,000 each, this was worth a staggering $40.92 billion – a sum that could instantly render this leading exchange insolvent. Fortunately, the platform has recovered 99.7% of the mistakenly sent BTC, temporarily preventing a full-blown crisis.

This fatal operational error, which can be described as "epic," was by no means an accident. From the occurrence of the error and the market shock to the emergency aftermath, every step starkly exposed the shortcomings in Bithumb's internal management and risk control.

35 Minutes of Terror

According to two official announcements from Bithumb (first released at 00:23, updated at 04:30) and a report by Yonhap News Agency on February 7, the timeline of this mistake is clear and astonishing.

Imagine this: Bithumb's operations team is running a "Random Treasure Chest" event, planning to reward 695 participating users with between 2,000 and 50,000 Korean won each (equivalent to between $1.37 and $34.16 USD). However, the employee in charge of the operation mistakenly switched the unit from "Korean Won" to "Bitcoin" when entering the reward amount.

The originally planned reward of 620,000 Korean won was ultimately changed to 620,000 BTC, of ​​which 249 users actually opened the treasure chest and received the mistakenly sent reward.

Event treasure chest page ( Source: Definalist)

Screenshot of receiving 2000 BTC ( Source: Definalist)

The progression of the timeline appears more rushed and passive:

• The rewards were officially distributed at 19:00 Korean time on February 6th;
• At 19:20, Bithumb discovered the problem of the reward being mistakenly sent out, and by then some users had already begun to sell their "windfall";
• At 19:35, the exchange immediately initiated a trading and withdrawal freeze;
• At 19:40, the accounts of all relevant users were blocked, a process that took 35 minutes.

The market ripple effect triggered by the mistaken distribution was immediate. Some users who received the mistakenly sent BTC chose to sell immediately, causing the price of Bitcoin on the Bithumb platform's BTC/KRW trading pair to drop by as much as 10% compared to other markets around 19:30 on February 6, reaching a low of $55,410.

Fortunately, Bithumb officially announced that the market price returned to normal within 5 minutes, and its "Domino Liquidation Prevention System" was functioning normally, preventing an on-chain cascading liquidation due to abnormal prices.

Meanwhile, as of the time of this announcement update, Bithumb has recovered a total of 618,212 BTC through its internal abnormal transaction control system, representing 99.7% of the mistakenly issued BTC. Regarding the assets (Korean Won and other cryptocurrencies) corresponding to the 1,788 BTC that users have already sold, 93% has also been recovered. The remaining unrecovered portion is approximately 125 BTC, and no evidence has been found that any BTC has been transferred to other exchanges or personal wallets.

Behind the basic mistakes

In its announcement, Bithumb repeatedly emphasized that the incident was unrelated to external hacking or system security vulnerabilities, but was merely an operational error, and that user assets were not affected. The exchange's trading and deposit/withdrawal services have now returned to normal.

However, this explanation clearly failed to quell market doubts—how could such a large amount of BTC be mistakenly sent without bypassing the exchange's multiple review mechanisms? Was this due to individual employee negligence or a systemic loophole in internal management?

It's important to understand that 620,000 BTC is no small amount, representing approximately 2.95% of the total BTC supply. At the time, with a market price of $66,000, the total value was a staggering $41 billion. The fact that such a massive sum of money was distributed without any multi-layered verification process speaks volumes about the chaotic internal management.

Such basic errors are never the fault of a single employee, but rather a concentrated manifestation of deficiencies in the company's internal management system, imperfect processes, and weak risk control awareness.

Reserves controversy

If a basic mistake is a "management stain" on Bithumb, then the reserve controversy sparked by this incident may crush market trust. As the mis-distribution incident unfolds, a core question has been widely raised in the market: How much BTC does Bithumb actually have in reserves? How could it have mistakenly distributed far more BTC than its publicly disclosed reserves in a single instance?

Bithumb's latest financial report (Q3 2025) shows that it maintains excess reserves in Bitcoin and other listed crypto assets, with a Bitcoin reserve ratio (the ratio of actual Bitcoin holdings to users' book assets on the platform) of 100.46%. However, the specific holdings are kept confidential. According to Yonhap News Agency, as of the end of Q3 2025, Bithumb held 42,619 Bitcoins in custody.

According to the latest data from CryptoQuant, as of February 7, 2026, Bithumb held 42,304 Bitcoins. In comparison, Binance held 658,855 Bitcoins, and Upbit held 179,523 Bitcoins.

So where did Bithumb get its 620,000 BTC, which far exceed its reserves?

In response to market skepticism, Bithumb issued an official statement claiming that the number of tokens held in its wallets is 100% consistent with the number displayed on the user interface, thanks to strict accounting management. The statement emphasized that it conducts quarterly asset audits by external accounting firms and publicly discloses the audit results. Unrecovered or sold-off BTC will be replenished using the company's own assets to ensure user assets remain unaffected.

Regulatory intervention + decreased trust

This accidental distribution incident not only triggered market panic and disputes over reserves, but also attracted the attention of South Korean financial regulators. Yonhap News Agency reported that South Korean financial authorities have clearly stated they will launch an on-site inspection of Bithumb, focusing on investigating the circumstances of the incident, the recovery of the mistakenly distributed BTC, and whether any illegal or irregular activities were involved.

For Bithumb, regulatory intervention is undoubtedly adding insult to injury. Even more serious is the collapse of user trust. The core competitiveness of a cryptocurrency exchange lies in users' trust in the security of their assets. This series of mishaps—incorrect unit input, complete failure of verification, mystery surrounding reserves, and passive emergency response—has directly exhausted the trust users have built up over time, and the platform's reputation and market share face an irreversible decline.

summary

The accidental release of 620,000 BTC may seem like an absurd, low-level human error, but it is actually a concentrated outbreak of internal management loopholes, lack of transparency in reserves, and weak risk control awareness within cryptocurrency exchanges.

Bithumb's lesson is straightforward and brutal: in the midst of rapid industry expansion, even the largest exchanges can collapse instantly due to a single "fingertip mistake" if they abandon the most basic process control, asset verification, and risk warning. However, since the FTX collapse, exchanges such as Binance, Bybit, and Bitget have successively implemented periodic proof-of-reserve (PoR) disclosure.

For ordinary users, this is a crucial reminder: crypto assets are inherently high-risk, and when choosing a platform, the priority should always be "transparency, compliance, security, and solid risk control" far outweigh "high returns and high activity subsidies".