Top Highlights
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Bithumb’s Bitcoin Blunder: Bithumb’s CEO admitted to past mistakes after a promotional event mistakenly credited users with 620,000 BTC, exposing significant system flaws.
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Regulatory Oversight Criticized: South Korea’s Financial Services Commission (FSC) and Financial Supervisory Service (FSS) faced backlash for failing to identify vulnerabilities during inspections.
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Ongoing Investigations: The FSS has extended its investigation into Bithumb’s compliance with regulations involving investor protection and anti-money laundering measures.
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Broader Impact on Industry: The incident prompts reviews of internal controls at major exchanges like Upbit and Coinone, potentially influencing future crypto regulations in South Korea.
$1.3B Error Sparks Probe Into Weak Financial Oversight
A major error in South Korea’s Bithumb cryptocurrency exchange has raised serious concerns about financial oversight. On February 6, a glitch during a promotional event credited users with 2,000 BTC each, instead of coins worth just 2,000 won, leading to a staggering 620,000 bitcoins being inaccurately “distributed.” This amount far exceeds Bithumb’s actual holdings of approximately 42,800 BTC.
Financial authorities, including the Financial Services Commission (FSC) and the Financial Supervisory Service (FSS), have come under fire for failing to identify vulnerabilities during previous inspections. Lawmakers, such as Rep. Kang Min-guk, revealed that the FSC and FSS conducted multiple reviews of Bithumb from 2022 to 2025. However, these checks didn’t catch any discrepancies in the exchange’s accounts.
Bithumb’s CEO, Lee Jae-won, admitted to past errors and confirmed that two smaller issues were resolved. Meanwhile, the FSS has extended its investigation to assess possible violations regarding investor protection and anti-money laundering protocols. Authorities are particularly focused on systemic flaws in Bithumb’s operations.
In the wake of this event, an emergency team from the Digital Asset eXchange Alliance (DAXA) is currently reviewing asset verification and internal controls at other major exchanges like Upbit and Coinone. The results could shape future regulatory measures and self-regulatory practices in the crypto space.
Interestingly, just a month prior, prosecutors announced they had recovered 320.8 bitcoins initially lost during a phishing incident. This incident involved funds seized from a couple connected to an illegal online gambling operation. Authorities remain vigilant, tracking hacking activities and monitoring exchanges to safeguard assets.
As Bithumb and financial regulators navigate this crisis, the emphasis on robust oversight becomes increasingly critical. Stakeholders hope this situation will lead to improvements in technology development and regulatory standards in the cryptocurrency industry.
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This content is for informational and entertainment purposes only and does not constitute financial or investment advice. Cryptocurrency is highly speculative and carries significant risk, including the potential loss of your entire investment. Do not make financial decisions based on this information. Consult a licensed financial advisor before investing. This site does not offer, sell, or advise on cryptocurrency, securities or other regulated financial products in compliance with SEC and applicable laws. Please do your own research and seek professional advise.
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