South Korean Crypto Exchange Accidentally Gave Away $95 Billion in Bitcoin

In brief

South Korean exchange Bithumb mistakenly credited users with 2,000 BTC each instead of a tiny cash reward.
The error was corrected within five minutes, but not before users sold an estimated $2 billion worth, per local reports.
The sell-off, only on Bithumb’s internal ledger and not on-chain, still triggered a sharp Bitcoin price crash on the exchange.

A South Korean crypto exchange accidentally credited users with billions of dollars’ worth of Bitcoin this week, triggering a flash crash in the platform’s listed value of the token.

Instead of airdropping users 2,000 won (a sum worth $1.37 at writing), the exchange, Bithumb, reportedly sent 2,000 BTC apiece, users said. That massive sum was worth some $142 million at writing, with Bitcoin recently trading around $71,000.

According to local reports, the accidental transfers were made as part of a “Random Box” giveaway, where 96% of recipients were poised to receive the lowest-value prize (presumably, the 2,000 won).

Around 700 Bithumb users bought Random Boxes, meaning roughly 672 likely received the erroneous Bitcoin. That would put the current value of Bitcoin accidentally transferred to Bithumb customers at over $95.4 billion.

The deposits were recorded only on Bithumb’s internal ledgers, though, and didn’t involve actual on-chain transfers of Bitcoin. The irregularity was detected and corrected within five minutes, the company said today in a blog post.

But that was plenty enough time for some amazed Bithumb users to attempt to sell off the funds and make millions off the company’s error. Korean financial authorities estimate that users managed to sell off over $2 billion worth of the phantom Bitcoin in that window, per local reports.

Such a rapid sell-off immediately plunged Bitcoin’s price on the exchange to $55,000—far below prices on other exchanges, despite the cryptocurrency’s recent downturn. The price of Bitcoin bottomed out around $60,000 on most exchanges Thursday before rebounding to a recent price of $71,047.

“The Bitcoin price temporarily fluctuated sharply as some accounts that received the Bitcoin sold it,” Bithumb said. “We want to make it clear that this incident is unrelated to any external hacking or security breach, and does not pose any issues with system security or customer asset management,” the company added.

Bithumb further insisted that the chain of events did not result in any customer’s loss of preexisting assets.