South Korean cryptocurrency platform Bithumb has successfully resolved a promotional mishap that resulted in certain accounts being credited with surplus Bitcoin. The exchange announced it had recovered 99.7% of the mistakenly distributed BTC on the same day of the incident. To address the 1,788 Bitcoin that were sold by users before the error was rectified, Bithumb utilized its corporate funds, ensuring that user balances remained accurate.
Bithumb assured users that its reserves of virtual assets, including Bitcoin, are fully backed by or exceed user deposits. The majority of the erroneously credited Bitcoin was retrieved from user accounts directly, while the funds that had already been sold in the market were compensated using the company's own resources.
In response to the incident, Bithumb has introduced a compensation plan. Users who were active on the platform during the glitch will receive 20,000 Korean won (approximately $15) each. Those who sold Bitcoin under unfavorable conditions due to the error will be reimbursed in full, with an additional 10% bonus. Furthermore, the exchange will waive trading fees for all its markets for a week, starting on Monday.
The issue arose on Friday when a system malfunction during a promotional event led to an unplanned allocation of Bitcoin, causing significant price volatility as affected users began selling the excess funds. Bithumb swiftly restricted the relevant accounts and stabilized trading within minutes to avert widespread liquidations.
The exchange confirmed that the incident was not a result of hacking, and no customer assets were compromised, with all deposits and withdrawals functioning normally. Although the total value of the mishap wasn't disclosed, some users reported receiving approximately 2,000 BTC.
This incident highlights ongoing operational challenges faced by centralized cryptocurrency exchanges. For instance, in June, Coinbase improved its systems to significantly reduce account restrictions after user complaints. Similarly, during a market downturn on October 10, Binance experienced technical issues that delayed trade executions, leading to substantial user compensations.
The cryptocurrency exchange landscape continues to evolve, with exchanges like Bithumb and others constantly refining their systems to prevent and manage such operational hurdles effectively.