South Korean regulators face scrutiny for failing to detect systemic flaws at the Bithumb cryptocurrency exchange. The criticism follows a major Bitcoin accounting error where a promotional blunder incorrectly credited users with 620,000 BTC. Authorities are extending investigations into the exchange’s internal controls and asset verification processes, which could influence future legislation.
South Korean financial authorities are under fire for missing critical flaws in Bithumb‘s systems. The oversight occurred despite multiple inspections by the Financial Services Commission and the Financial Supervisory Service between 2022 and 2025.
On February 6, a system error during a promotion mistakenly credited users with 2,000 BTC each instead of coins worth about $1.38. This resulted in a ledger entry showing 620,000 Bitcoin was distributed, far exceeding the exchange’s actual holdings of roughly 42,800 BTC.
Lawmakers said the incident reveals deeper weaknesses in internal controls and regulatory supervision. “Whether regulators’ inspections were largely procedural” was a question raised by Rep. Han Chang-min of the Social Democratic Party.
The FSS has extended its probe through February to investigate potential investor protection and anti-money laundering violations. Bithumb CEO Lee Jae-won acknowledged two smaller prior errors, which will also be reviewed.
An emergency team is now reviewing asset verification at other major exchanges, including Upbit, Coinone, Korbit, and GOPAX. The results are expected to inform future crypto legislation and self-regulatory rules.
Separately, prosecutors have recovered all $30 million worth of Bitcoin that went missing from a criminal case last August. Officials said the 320.8 bitcoins were returned voluntarily on February 17 after the hacker failed to cash them out.
