Bithumb mistakenly credited 2,000 BTC to users instead of a small reward, triggering rapid sell-offs and a sharp price drop on the exchange.
A reported internal error at South Korea-based crypto exchange Bithumb led to an unexpected market disruption after users received Bitcoin by mistake.
Instead of a small rewards payout, the exchange reportedly distributed 2,000 BTC to hundreds of accounts. The incident caused a sharp price drop on the platform and raised concerns about exchange controls and internal accounting systems.
Mistaken Rewards Distribution Triggers Error
According to multiple media reports, the incident began during a routine rewards payout process.
A staff member was reportedly tasked with issuing a random prize worth 2,000 South Korean won. The value of the intended reward was about $1.50 at the time.
The unit was allegedly entered incorrectly during the process. Bitcoin was selected instead of the local currency.
As a result, users received Bitcoin rather than a small fiat-based reward. The error went unnoticed until distributions were completed.
The total amount sent was reported to be around 2,000 BTC. At prevailing market prices, the value was close to $130 million.
The Bitcoin was credited to user balances on the exchange ledger.
Immediate Selling Pressures Local Market
Users who received the unexpected Bitcoin reportedly sold the assets soon after receiving them.
The selling activity occurred within minutes of the credits appearing in accounts. This led to heavy sell pressure on the exchange.
Bitcoin prices on Bithumb dropped more than 10% below global market rates. The decline was limited to the exchange and did not reflect broader market pricing.
Arbitrage activity later helped narrow the gap.
The price stabilized after the exchange reportedly froze affected accounts. Trading conditions returned closer to normal levels after corrective actions were taken.
There was no report of Bitcoin leaving the exchange’s wallets during the event.
Related Reading: Korea’s Bold Crypto Exchange Ownership Cap: What It Means
Off-Chain Accounting and Exchange Controls
Blockchain data did not show a corresponding on-chain transfer of 2,000 BTC. Reports suggest the issue was limited to internal accounting records.
The credited balances were part of the exchange’s off-chain ledger system.
This structure allows exchanges to manage balances without immediate blockchain settlement.
While common in centralized platforms, such systems rely on strict internal controls. Errors can still affect trading activity even without on-chain movement.
The incident drew attention to operational risks tied to centralized exchanges. Even without blockchain transactions, internal mistakes can influence market prices.
The event occurred despite ongoing efforts across the industry to improve safeguards and controls.
Source: https://www.livebitcoinnews.com/bithumb-accidentally-sends-2000-btc-users-instantly-dump-the-market/
