South Korean cryptocurrency exchange Bithumb has initiated legal proceedings to freeze seven Bitcoin, valued at approximately $8 million, that remain unreturned following a significant payout error in February. The exchange is escalating a dispute with a small group of users who have refused to return the mistaken funds.
Bithumb has begun a provisional seizure, a pre-lawsuit measure to prevent asset transfer, with a civil case anticipated. The error occurred on February 6 during a promotion where staff mistakenly entered "BTC" instead of "KRW," crediting 620,000 Bitcoin to 249 winners on internal ledgers. This human error momentarily inflated the exchange's records by over $40 billion in BTC.
Shortly after the error, some users sold approximately 1,788 BTC before Bithumb froze accounts. While the exchange reversed most transactions and recovered the majority of sold coins, an estimated $8.3 million remained outstanding. This figure has since reduced to seven Bitcoin after extended outreach efforts.
Legal experts in Korea indicate such situations fall under unjust enrichment, requiring recipients to return assets. If coins were sold, users may be obligated to repurchase them at current market prices to settle the debt. This incident underscores how human error, coupled with the rapid and irreversible nature of cryptocurrency transactions, can generate substantial financial crises.
Bithumb ranks as the second-largest cryptocurrency exchange in South Korea, reporting a 24-hour trading volume of $388 million, trailing only Upbit.