Simply put
- South Korean exchange Bithumb mistakenly credited users with 2,000 BTC each instead of a small cash reward.
- The error was resolved in about five minutes, but not before users had sold an estimated $2 billion worth.
- This sale occurred only on Bithumb’s internal ledger, not on the blockchain, yet it still led to a noticeable decline in Bitcoin prices on the exchange.
This week, a South Korean cryptocurrency exchange unintentionally distributed billions of dollars in Bitcoin to its users, resulting in a rapid drop in the platform’s token value.
Instead of giving users 2,000 won (about $1.37 at the time), Bithumb reportedly sent each user 2,000 BTC. This staggering amount is around $142 million with Bitcoin trading at approximately $71,000.
According to local reports, this mistake occurred during a “Random Box” giveaway where 96% of participants were expecting to receive the smallest prize, likely 2,000 won.
Approximately 700 users bought random boxes, suggesting around 672 people might have received the incorrect Bitcoin. This would mean the mistaken transfer had a value exceeding $95.4 billion.
However, this transaction was logged only on Bithumb’s internal ledger; no actual Bitcoin was transferred on the blockchain. The company reported that the error was detected and corrected within five minutes.
Despite the swift resolution, some Bithumb users quickly sold these funds, trying to profit from the mix-up. Reports indicate that users managed to sell over $2 billion worth of these phantom bitcoins through the exchange.
This rapid selling triggered a price fall for Bitcoin, which dropped to $55,000 on Bithumb, contrasting sharply with prices on other exchanges amid a broader economic downturn. Bitcoin had recently been around $60,000 before climbing back to $71,047.
“The price of Bitcoin saw significant fluctuations as some users who received Bitcoin sold their assets,” Bithumb remarked. They emphasized that this incident was not due to hacking or a security breach and did not impact system security or the management of customer assets.
Additionally, the company asserted that the situation did not result in any loss of existing client assets.
