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Photo courtesy of Yonhap News |
[Alpha Biz= Kim Jisun] Exchange recovers 99.7% of mispaid assets, pledges 110% compensation and launches KRW 100 billion customer protection fund
South Korean cryptocurrency exchange Bithumb mistakenly distributed approximately 620,000 bitcoins—valued at roughly 60 trillion won—during a promotional event, with its chief executive acknowledging that two similar erroneous payment incidents had occurred in the past.
Lee Jae-won, CEO of Bithumb, made the remarks on Feb. 11 during a plenary session of the National Assembly’s Political Affairs Committee, responding to questions from Rep. Han Chang-min of the Social Democratic Party.
“There had been communication with our audit office, and there were two minor cases in the past,” Lee said. “There were two erroneous payments, and we recovered them.”
The latest incident occurred on the evening of Feb. 6 during a “random box” reward event. Bithumb intended to distribute a total of 620,000 won to 249 participants but mistakenly issued 620,000 bitcoins instead.
The number of bitcoins erroneously distributed exceeded by more than 3,500 times the 175 bitcoins Bithumb held as of the third quarter of last year. Even when combined with the 42,619 bitcoins entrusted to the exchange by customers, the amount far surpassed the company’s available holdings.
Bithumb recognized the error approximately 20 minutes later and immediately suspended withdrawals. It successfully recovered 618,212 bitcoins, or 99.7% of the mispaid amount. However, 125 bitcoins—worth approximately 12.3 billion won—that had already been sold through other exchanges were not recoverable.
The company stated that it covered the shortfall using its own assets and announced compensation measures, including reimbursing affected customers at 110% of their losses resulting from low-price sales. Bithumb also unveiled a 100 billion won customer protection fund.
Explaining the cause of the incident, Lee said that while multiple payment approval procedures had been in place previously, in this case a single staff member mistakenly processed a 620,000-won payment as 60 trillion won.
“Of our entire workforce, about 20 employees were involved in the event operations,” Lee said. “The mistake was identified internally during the event verification process about 20 minutes after it occurred.”
Lee issued a public apology, stating, “We sincerely apologize to the public who were deeply concerned by this erroneous event payment. We also extend our heartfelt apologies to our customers who trusted us, to lawmakers working tirelessly, and to the financial authorities for the immeasurable concern we have caused. I bow my head in apology.”
When asked by Rep. Kim Hyun-jung of the Democratic Party whether additional compensation would be provided, Lee responded, “We will make efforts to provide further compensation.”
Alphabiz Reporter Kim Jisun(stockmk2020@alphabiz.co.kr)
