South Korean crypto exchange races to recover $40bn of bitcoin sent to customers by mistake

"The mistake occurred on 6 February, when an employee entered prize amounts in bitcoin rather than Korean won during a random box promotional event. The plan had been to send a total of 620,000 won ($423) in prizes to 695 qualifying customers, but the employee instead sent 620,000 bitcoins ($42bn). Of those eligible, 249 opened their prize boxes and received their reward, equivalent to roughly 14 times more bitcoin than the exchange owns."

"Lee Chan-jin, governor of South Korea's Financial Supervisory Service (FSS), called it catastrophic for those who sold the bitcoin they received. Bitcoin prices have risen since Friday, meaning any customers required to return cryptocurrency could face losses. Lee added that the incident exposed structural problems in how exchanges operate internal ledger systems. Separately, legal experts are divided on whether recipients who sold what they received could face criminal prosecution, given a 2021 supreme court ruling that cryptocurrency does not constitute property under Korean criminal law."

"Bithumb said it corrected 99.7% of the erroneous credits by reversing internal ledger entries and issued an apology. However, 86 customers sold about 1,788 bitcoins in the 35 minutes before the exchange froze the affected accounts, financial authorities said, triggering a brief price drop on its platform. Some had been withdrawn to personal bank accounts, and some was used to buy other cryptocurrencies, according to local media."

An employee entered prize amounts in bitcoin instead of Korean won during a promotional event on 6 February, causing 620,000 bitcoins to be credited instead of 620,000 won. The plan had been to send 620,000 won in prizes to 695 customers, but 249 recipients opened their boxes and received the erroneous bitcoin credits. Bithumb reversed internal ledger entries and recovered 99.7% of the mistaken credits, but about 13bn won remains unrecovered after some sold or withdrew funds. Eighty-six customers sold roughly 1,788 bitcoins before accounts were frozen, triggering a brief price drop. Financial authorities warned of structural ledger problems and legal uncertainty over criminal liability for recipients who sold received cryptocurrency.

Read at www.theguardian.com