A South Korean crypto exchange accidentally credited users with billions of dollars’ worth of Bitcoin this week, triggering a flash crash in the platform’s listed value of the token.
Instead of airdropping users 2,000 won (a sum worth $1.37 at writing), the exchange, Bithumb, reportedly sent 2,000 BTC apiece, users said. That massive sum was worth some $142 million at writing, with Bitcoin trading around $71,000 as of Friday when the issue was first disclosed.
According to local reports, the accidental transfers were made as part of a “Random Box” giveaway, where 96% of recipients were poised to receive the lowest-value prize (presumably, the 2,000 won).
Bithumb said on Saturday that 695 people were sent Bitcoin. While initial estimates from local media put the value at Bitcoin accidentally transferred to customers at over $95 billion, the company said Saturday that 620,000 BTC—about $43 billion worth at Saturday’s current price—was actually credited to users’ accounts.
The deposits were recorded only on Bithumb’s internal ledgers, though, and didn’t involve actual on-chain transfers of Bitcoin. The irregularity was detected and corrected within five minutes, the company said Friday in a blog post.
But that was plenty enough time for some amazed Bithumb users to attempt to sell off the funds and make millions off the company’s error. Korean financial authorities estimate that users managed to sell off over $2 billion worth of the phantom Bitcoin in that window, per local reports.
Such a rapid sell-off immediately plunged Bitcoin’s price on the exchange to $55,000—far below prices on other exchanges, despite the cryptocurrency’s recent downturn. The price of Bitcoin bottomed out around $60,000 on most exchanges Thursday before rebounding to a recent price of $71,047.
“The Bitcoin price temporarily fluctuated sharply as some accounts that received the Bitcoin sold it,” Bithumb said. “We want to make it clear that this incident is unrelated to any external hacking or security breach, and does not pose any issues with system security or customer asset management,” the company added.
Bithumb further insisted that the chain of events did not result in any customer’s loss of preexisting assets.
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On Saturday, the exchange said that it quickly recovered 618,212 BTC of the credited funds, and that it has further clawed back 1,788 BTC from the sold assets (93% worth).
“We are also taking swift action to recover the remaining unrecovered assets,” the firm said. “The amount of BTC that was not recovered in this incorrect payment incident and already sold will be accurately adjusted using company assets.”
