USDBithumb Seeks Court Seizures After $43 Billion Bitcoin Error
Exchange escalates recovery as holdouts resist returning mistakenly distributed BTC
TL;DR
- Bithumb is pursuing court-backed asset seizures to recover 7 BTC after a February error distributed 620,000 BTC.
- The mistake, caused by a unit input error, triggered a 15% drop in the BTC-KRW pair.
- The exchange recovered 99.7% of funds, but 1,788 BTC were already sold.
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Bithumb has moved to seize assets through court action after a February operational error mistakenly distributed 620,000 BTC worth more than $43 billion, with the exchange now targeting 7 BTC from users who have refused to return the funds as of April 9, 2026.
The South Korean exchange is seeking provisional seizure orders to freeze assets linked to remaining holders, marking a shift from voluntary recovery efforts to formal legal enforcement after requests for returns failed. The targeted 7 BTC is valued at approximately $496,000.
Error origin and immediate market impact
The incident occurred on Feb. 6, 2026, during a promotional campaign when a staff member entered rewards in BTC instead of KRW, resulting in a large-scale misallocation of Bitcoin to hundreds of user accounts. The mistake has been described as a “fat finger” incident.
The error triggered immediate market disruption. The BTC-KRW trading pair on Bithumb fell about 15% as users reacted to the sudden influx of balances, causing trading losses for participants during the volatility.
Bithumb said it would compensate affected users at 110% of their losses and pledged to strengthen internal controls and establish an emergency protection fund.
Recovery progress and unresolved balances
The exchange recovered the vast majority of the funds shortly after discovering the error, reclaiming 99.7% of the distributed Bitcoin within hours. However, 1,788 BTC, representing 0.3% of the total, had already been sold by recipients before recovery actions were completed.
Some recipients refused to return the Bitcoin, arguing they were “not obligated” to do so because the error originated from Bithumb’s own systems.
The exchange’s legal action is based on the classification of mistakenly received assets as unjust enrichment under South Korean law, which typically requires recipients to return such funds. Provisional seizure allows assets to be temporarily frozen ahead of a final court ruling.
Legal pressure, user exposure, and regulatory fallout
Users who sold the mistakenly received Bitcoin face additional financial exposure. Bitcoin briefly traded near 80 million won during the incident but later rose to around 105 million won, meaning those required to return BTC may need to repurchase it at higher prices.
The situation has drawn criticism from lawmakers, particularly over how Bithumb could distribute such a large amount of Bitcoin despite holding about 46,000 BTC at the time. The discrepancy raised concerns about internal controls and risk management.
The fallout has extended into policy discussions, with the ruling Democratic Party advancing plans to impose a 15% to 20% cap on individual stakes in cryptocurrency exchanges.
Bithumb has also delayed its initial public offering plans to 2028 as it manages the aftermath of the incident and strengthens compliance systems.
FAQ
What caused the Bithumb error?
A staff member entered BTC instead of KRW during a promotion.
How much Bitcoin was mistakenly distributed?
620,000 BTC worth over $43 billion.
How much has been recovered?
99.7% was recovered; 1,788 BTC were sold.
What is Bithumb doing now?
Seeking court orders to freeze assets and recover remaining Bitcoin.
This article has been refined and enhanced by ChatGPT.
