South Korean Financial Watchdog Launches Full Investigation Into Bithumb Following $43 Billion Bitcoin Distribution Error

Reading Time: < 1 minute

South Korea’s primary financial regulatory body, the Financial Supervisory Service (FSS), has initiated a comprehensive formal investigation into the cryptocurrency exchange Bithumb. This decisive action comes in direct response to a major incident last week in which the platform erroneously distributed Bitcoin worth approximately $43 billion to its users.

According to a report from the Yonhap news agency this Tuesday, the FSS elevated what was initially planned as a routine inspection into a full-scale probe following last week’s operational debacle. An official within the FSS informed Yonhap that the agency is approaching the investigation with the utmost seriousness.

The official further stated that regulatory authorities are prepared to implement stern measures against any activity found to undermine proper market order.

Investigators are said to be focusing their scrutiny on the mechanisms and internal controls that allowed Bithumb to distribute a volume of Bitcoin that vastly exceeded the exchange’s actual holdings.

The incident occurred on February 6, when the South Korean exchange mistakenly distributed 620,000 BTC, valued at roughly $43.1 billion, across hundreds of user accounts during a promotional campaign. Preliminary reports indicate the error originated from a clerical mistake, where a staff member incorrectly input the reward unit as Bitcoin (BTC) instead of the intended Korean won (KRW).