South Korean cryptocurrency exchange Bithumb is pursuing legal action to recover 7 Bitcoin, valued at $496,000, from users who have not returned funds mistakenly distributed during a significant trading error. The exchange has filed for provisional seizure orders through South Korean courts.
This legal move targets accounts still holding the Bitcoin, which was erroneously distributed to users in February due to a trading system malfunction. Some recipients have argued they are not obligated to return the assets, citing Bithumb's operational mistake.
Under South Korean law, mistakenly received assets are considered unjust enrichment and must be returned. The court's approval of Bithumb's seizure request could set a precedent for recovery through formal legal channels when voluntary returns are refused.
The February 6 incident involved the accidental distribution of 620,000 BTC, worth over $43 billion, to hundreds of user accounts. While Bithumb recovered most of the funds within hours, 1,788 BTC were sold by recipients before the exchange could reclaim them. The exchange absorbed these losses from its reserves and has delayed its IPO plans until 2028.
In response to the incident, South Korea's Financial Services Commission has mandated that all cryptocurrency exchanges reconcile internal ledgers with actual asset holdings every five minutes. This directive aims to improve real-time detection and response to operational errors.