Bithumb Wins Court Battle Over $40 Billion Bitcoin Error

A Seoul court ordered a user to return $145,000 to Bithumb after a clerical error mistakenly distributed 620,000 Bitcoin during a promotion.

A court in Seoul ruled on August 27 that a user must return approximately 194 million won ($140,000-$145,000) received following a mistaken Bitcoin distribution in February.

According to information from Digital Asset Works, this marks the second decision in favor of the exchange in just two consecutive days. The ruling carries weight beyond the specific dollar amount; the court determined that funds realized from erroneously provided virtual assets constitute unjust enrichment, granting Bithumb a stronger legal standing in its remaining civil claims.

A Single Typo Created 620,000 BTC

The incident began on February 6 during a Bithumb promotional campaign. An employee processing rewards for a “random-box” event accidentally entered Bitcoin instead of Korean won as the unit for payment.

This resulted in an accounting distribution of approximately 620,000 BTC to user accounts. Based on market prices at the time, the nominal value of these assets briefly exceeded $40 billion.

However, Bithumb did not actually own or transfer $40 billion worth of Bitcoin. The tokens appeared within the exchange’s internal offline accounting system without corresponding BTC reserves. In effect, the platform temporarily generated a massive quantity of “ghost Bitcoin” that existed only within its own ledgers.

This specific technical quirk transformed an operational blunder into a significant market disruption.

1,786 BTC Sold Before Bithumb Halted Trading

Bithumb reacted within minutes, but some users managed to utilize the erroneous balances before restrictions were implemented.

Approximately 1,786 BTC were sold before the exchange successfully blocked operations. This sudden surge in supply caused a localized price flash-crash, with Bitcoin dropping by roughly 17% specifically on the Bithumb platform.

It is important to distinguish this from global market movements. The decline was not a 17% crash in the global price of BTC, but rather a local price distortion triggered by the sale of assets that should not have existed in those user accounts.

The exchange subsequently began canceling the erroneous balances and recovering the assets.

Bithumb Recovered 99.7%, But a Small Group Held Out

Data from the exchange shows that 99.7% of the mistakenly distributed assets were returned voluntarily. The remaining friction involved users who successfully sold portions of the credited Bitcoin and subsequently refused to return the resulting cash proceeds.

In March, Bithumb initiated several civil lawsuits to recover these outstanding amounts.

The first of these recent rulings arrived on August 26 regarding the smallest of the four claims. A day later, the 90th Civil Division of the Seoul Central District Court, presided over by Judge Kim Yoo-sung, issued another decision in favor of the exchange.

The defendant is now required to return approximately 194 million won, which the court views as funds obtained without legal basis.

The Precedent Outweighs the Recovered Sums

For Bithumb, the immediate financial impact of these rulings is relatively small compared to the scale of the initial error. The more critical factor is whether the courts will apply the same legal logic to the remaining lawsuits.

So far, the consecutive rulings favor the exchange: the fact that the platform displayed the assets as available and temporarily allowed them to be traded does not automatically grant the user the right to keep the proceeds.

This case holds implications for the broader crypto sector. Centralized exchanges rely on internal accounting systems where transfers between user balances do not necessarily require on-chain blockchain movement. Consequently, a system error can create a tradable balance even if the underlying asset was never actually transferred.

The Bithumb incident highlights the magnitude of this risk: a single incorrect designation was enough to create an accounting balance of 620,000 BTC and disrupt pricing on one of Asia’s largest crypto markets for several minutes.