South Korean cryptocurrency exchange Bithumb has pledged full compensation and implemented new safeguards following a massive operational error that saw it accidentally airdrop approximately 620,000 Bitcoin (BTC) to users. The incident occurred on February 6, 2026, during a promotional event intended to distribute 2,000 Korean Won (KRW) in rewards. Due to a human error, an employee mistakenly credited the equivalent value in Bitcoin instead, distributing roughly 2,000 BTC to each of 695 affected users.
The immediate sell-off by some recipients caused a flash crash on Bithumb's internal market, with the BTC price plunging to $55,000, significantly below the global market price which remained above $66,000. The exchange's internal control systems were activated within 20 to 35 minutes, halting withdrawals and blocking accounts to prevent further outflows. This swift action allowed Bithumb to recover 618,212 BTC, or 99.7% of the erroneously distributed amount.
Bithumb CEO Lee Jae-won announced a comprehensive compensation plan. Users who sold coins at a loss during the panic will be reimbursed for 110% of their losses. The company estimates the total loss from this panic selling at about 1 billion KRW ($680,000). All users active during the incident will receive 20,000 KRW ($15), and trading fees will be waived for seven days. To cover the remaining shortfall of 1,788 BTC not recovered, Bithumb will use company assets.
In a significant long-term move, Bithumb announced the establishment of a permanent Customer Protection Fund worth 100 billion KRW ($68 million) to handle future incidents. The exchange also committed to system upgrades, including multi-step payment approvals, enhanced asset verification, and AI-powered monitoring for abnormal transactions.
The error has drawn regulatory scrutiny. South Korea's Financial Services Commission (FSC) and Financial Supervisory Service (FSS) have launched probes into the incident. FSC Vice Chairman Kwon Dae-young led an emergency inspection on February 7, with officials from the Financial Intelligence Unit also present. Bithumb stated it is coordinating closely with regulators to prevent similar errors in the future.
