South Korean lawmakers are intensifying scrutiny of financial regulators after cryptocurrency exchange Bithumb erroneously credited customers with 620,000 Bitcoin it did not own. The error, stemming from a promotional event on February 6, sparked a brief sell-off and highlighted concerns over market oversight. Legislators criticized the Financial Services Commission for failing to detect systemic flaws during multiple inspections since 2022.
South Korean lawmakers are increasing pressure on financial regulators following a major error at crypto exchange Bithumb. The exchange mistakenly distributed 620,000 non-existent Bitcoin during a promotion, briefly triggering a rush to sell.
Legislators claim the Financial Services Commission missed critical flaws in Bithumb‘s systems despite several inspections since 2022. Representative Kang Min-guk argued the incident reveals structural weaknesses in the crypto market’s regulation.
The error occurred when Bithumb credited 2,000 Bitcoin per user instead of 2,000 Korean won, or about $1.40. The FSC launched an investigation into the incident on February 10, pledging stern legal action.
That probe has now been extended into late February for additional review. The inspection reportedly also covers two prior, smaller incidents of mistaken payouts at the exchange.
Bithumb CEO Lee Jae-won acknowledged the two previous cases during a National Assembly session. “There were two previous cases in which coins were mistakenly paid out and later recovered, but the amounts were minimal,” he stated.
The exchange said it recovered most of the miscredited assets from the latest event. Only 125 BTC, worth approximately $8.6 million, remained unrecovered.
This incident coincides with renewed scrutiny over authorities’ handling of seized crypto assets. In 2021, 22 Bitcoin vanished from a police station cold wallet during an audit.
A separate 2025 case saw 320 Bitcoin disappear from a prosecutors’ office due to a leaked password. Authorities recently disclosed that the full amount from that case was recovered after the hacker returned the funds.
