A South Korean cryptocurrency exchange, Bithumb, accidentally gave away more than $40 billion worth of bitcoins to customers as a promotional giveaway, leading to a massive sell-off from the platform.
Bithumb offered an apology and confirmed that they have recovered 99.7 per cent of the total of 6,20,000 bitcoin, which are worth approximately $44 billion at current prices after the erroneous event occurred on Friday. They also placed a temporary freeze on trading and withdrawal capabilities for the 695 users that received erroneous distributions within 35 minutes of the event on Friday.
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How it all happened
The ambit of Bithumb was to provide small cash giveaways, 2,000 Korean Won or $1.37, to users but the users ended up receiving at least 2,000 bitcoins each, according to several media reports.
"We would like to make it clear that this incident is unrelated to external hacking or security breaches, and there are no problems with system security or customer asset management," Bithumb said in a statement.
What financial regulators have to say
South Korea's financial regulators, including Financial Services Commission, stated this incident shows that there are vulnerabilities and risks related to virtual assets.
They said that if from now on, the review of internal control systems, as well as virtual assets held on and operated by, Bithumb and other digital crypto exchanges indicates anything out of the ordinary, they would launch an on-site inspection.
On Friday evening, bitcoin's value decreased by approximately 17 per cent to a price of approximately 81.1 million won when traded on Bithumb. Bitcoin subsequently increased in value to approximately 104.5 million won.
When looking at current trends, it would appear that Bithumb is still much smaller than Upbit, the largest crypto provider in South Korea, according to Reuters report.
