South Korean cryptocurrency exchange Bithumb is seeking a court order to freeze approximately 7 BTC after a payout error earlier this year. The exchange mistakenly distributed Bitcoin during a promotional event, and while most funds were recovered, a small group of users has refused repayment. Bithumb has initiated a provisional seizure, a legal step to temporarily lock assets ahead of a potential civil lawsuit.
Bithumb has moved to secure court approval to freeze 7 BTC that remain unreturned following a payout error. The exchange initiated a provisional seizure after a small number of users declined to hand back the funds.
This legal step allows assets to be temporarily locked before a formal civil lawsuit is filed. The dispute stems from a February incident where the exchange mistakenly distributed Bitcoin instead of Korean Won.
Bithumb had intended to send a total of approximately $450 to 249 participants in a promotional event. An input error caused the system to process the payments in BTC, leading to an accidental transfer of nearly 620,000 BTC.
The exchange reversed transactions within minutes but could not fully retrieve the assets. Some recipients had already sold the BTC or used it to purchase other digital assets.
While most mistakenly issued funds have been recovered, a small group has refused to return the remainder. Some users argued that the error originated from the exchange and therefore should not obligate them to return the assets.
Legal experts believe the case is one of unjust enrichment, requiring recipients to return assets received in error. Authorities indicated individuals who converted the Bitcoin into cash could face greater complications.
These users may need to repurchase Bitcoin at a higher market rate to comply with any court-ordered return. Bitcoin prices on the exchange have risen significantly since the time of the incident.
