Despite a staggering $43 billion internal accounting error, a looming six-month business suspension, and a record fine, the board of directors at South Korea's second-largest cryptocurrency exchange, Bithumb, is pushing to reappoint current CEO Lee Jae-won for a new two-year term. A high-stakes shareholders' meeting is scheduled for March 31, 2026, to decide his fate.
The reappointment hinges on a legal loophole. Under South Korean law, crypto exchanges are classified as Virtual Asset Service Providers (VASPs), not formal financial institutions. This distinction allows Bithumb's board to propose Lee's reappointment, whereas executives at traditional financial institutions would typically be forced to step down after receiving a reprimand warning from the Financial Intelligence Unit (FIU). The board argues Lee is essential to navigate the exchange's current regulatory challenges.
The controversy stems from a catastrophic "fat-finger" error in February 2026. An employee mistakenly entered BTC instead of KRW (South Korean won) during a promotion, causing the system to credit users with 2,000 BTC (worth $132 million each) instead of 2,000 won ($1.38). In total, $43 billion worth of Bitcoin was erroneously "created" on Bithumb's internal ledger—an amount nearly 15 times the exchange's actual reserves. The Financial Supervisory Service (FSS) has nearly completed its investigation into this "ghost coin" incident, with lawmakers like Rep. Kang Min-guk criticizing the FSS for failing to detect systemic flaws during six previous inspections between 2022 and 2025.
Compounding its troubles, Bithumb recently received a 36.8 billion won fine from the FIU for failures in anti-money laundering (AML) and know-your-customer (KYC) standards. The exchange also faces a six-month partial suspension that would restrict new users from withdrawing assets.
In a contrasting move, rival exchange Dunamu (operator of Upbit) chose to replace its leadership after a similar reprimand in early 2025. Former CEO Lee Sirgoo stepped down roughly three months after receiving a 35.2 billion won fine to protect the company's reputation and facilitate its license renewal.
Alongside the CEO reappointment, Bithumb's board is seeking shareholder approval to double its issuance limit for convertible bonds and bonds with warrants to 300 billion won ($225 million). It has also proposed appointing tax expert Jung Yeon-dae as a new auditor in response to FSS findings of "complacent supervision."
Bithumb remains under investigation for its order book sharing arrangement with the unregistered Stellar Exchange, a situation that could jeopardize its ability to renew its VASP license and lead to additional sanctions.
