South Korean lawmakers are increasing pressure on financial regulators following a system failure at Bithumb, the country’s largest cryptocurrency exchange. The error earlier this month led to the accidental distribution of over $43 billion worth of Bitcoin.
The February 6 incident has sparked political scrutiny of both the exchange and the agencies overseeing the virtual asset market. According to The Korea Times, members of the National Assembly are questioning how such a massive error occurred despite repeated regulatory inspections.
Rep. Kang Min-guk of the main opposition People Power Party revealed that the Financial Services Commission (FSC) reviewed Bithumb three times between 2022 and 2025. During the same period, the Financial Supervisory Service (FSS) also conducted three separate inspections. Yet regulators failed to detect what is now described as a critical structural weakness in the exchange’s systems.
Kang argued that existing oversight was inadequate, noting that safeguards were insufficient to prevent a situation where a single employee could initiate massive coin transfers. He stated that the episode reveals deeper structural weaknesses in the virtual asset market, including complacent supervision and regulatory gaps.
Instead of crediting users with Bitcoin worth about $1.38, the system mistakenly credited 2,000 Bitcoin per user, resulting in a total incorrect distribution of 620,000 Bitcoin.
Rep. Han Chang-min of the minor Social Democratic Party also criticized regulators, questioning whether they had meaningfully evaluated the exchange’s internal systems. He suggested authorities appeared to be shifting responsibility onto Bithumb despite their supervisory role.
In response, the FSS has extended the deadline for its formal investigation from February 13 to the end of the month, citing the need for more time. An eight-member inspection team is intensifying its review, focusing on possible violations related to investor protection and anti-money laundering compliance. Particular attention is being paid to the system architecture that allowed coins not actually held by the exchange to be credited to users. Regulators have not ruled out the possibility of uncovering further erroneous distributions.
Separately, financial authorities have reportedly formed an emergency response team with the Digital Asset eXchange Alliance (DAXA), a self-regulatory body representing domestic exchanges. The team has begun inspecting asset verification and internal control systems at four other platforms: Upbit, Coinone, Korbit, and GOPAX. Any deficiencies found are expected to be incorporated into DAXA’s self-regulatory guidelines and could influence the next phase of cryptocurrency legislation in South Korea.
Frequently Asked Questions
Of course Here is a list of FAQs about the Bithumb Bitcoin error and its fallout designed to be clear and helpful for all levels of understanding
Beginner Definition Questions
1 What exactly happened with Bithumb
Bithumb a major South Korean cryptocurrency exchange accidentally displayed a massive erroneous balance of over 43 billion worth of Bitcoin in a users account This was a display glitch not an actual transfer of that amount
2 What is Bithumb
Bithumb is one of the largest and most wellknown cryptocurrency exchanges in South Korea similar to how Coinbase is in the United States Its a platform where people can buy sell and trade digital assets like Bitcoin
3 What does a display glitch mean
It means the wrong number showed up on the screen due to a software or data error Think of it like a website bug showing your bank balance as 1 million when its really 1000 The underlying money wasnt actually there
4 Why is this a big deal if it was just a display error
While the money wasnt real the error exposed serious problems a lack of internal controls the potential to mislead investors and it reignited political debates about the need for stricter regulation of crypto exchanges in South Korea
Intermediate Impact Questions
5 Did anyone actually get 43 billion
No The error was corrected within a short time and the account balance was returned to its correct value The user could not have withdrawn that amount
6 What has been the political reaction in South Korea
Politicians especially from the opposition Democratic Party have seized on the incident They are using it to criticize the current governments approach to crypto regulation calling for tougher laws more oversight and better consumer protection to prevent real financial disasters
7 Could this happen on other exchanges
While rare for an error of this scale technical glitches can happen on any digital platform This incident highlights why experts always advise using exchanges with strong security histories transparent operations and robust internal systems
8 What are the risks for Bithumb now
Bithumb faces reputational damage a potential loss of user trust and almost certainly increased scrutiny from South Korean financial authorities They may also face fines or mandatory system audits