In a staggering display of operational risk, South Korean cryptocurrency exchange Bithumb is scrambling to recover from a massive "fat finger" error that accidentally distributed approximately $40 billion worth of Bitcoin to its users. The incident, which began unfolding on Friday and dominated headlines through Sunday, February 8, 2026, occurred when a promotional giveaway intended to reward users with small cash prizes was misconfigured. Instead of crediting accounts with 2,000 Korean Won (approx. $1.37), the system transferred 2,000 Bitcoin (BTC) to each eligible user. The blunder triggered a localized flash crash and has forced an emergency freeze of the platform's assets.
The $40 Billion Glitch: How 2,000 Won Became 2,000 BTC
The operational failure originated from a routine marketing campaign known as the "Random Box" event. According to Bithumb's official statements released this weekend, the promotion was designed to distribute small participation rewards to loyal customers. However, during the configuration of the payout parameters, an employee reportedly confused the currency unit inputs.
Rather than inputting the intended reward of 2,000 KRW, the system was instructed to distribute 2,000 BTC per user. With the Bitcoin price in February 2026 hovering around $71,000, this error effectively credited each of the 695 affected users with roughly $142 million in digital assets. The total erroneous distribution amounted to approximately 620,000 BTC—a sum that technically exceeds the exchange's cold wallet reserves and momentarily represented a value of over $40 billion.
Immediate Market Chaos and Flash Crash
The impact of the Bithumb Bitcoin error was instantaneous. As users discovered the astronomical balances in their wallets, many attempted to liquidate the funds immediately. This wave of panic selling flooded Bithumb's order books, causing a severe decoupling of price. While Bitcoin traded steadily above $70,000 on global platforms like Binance and Coinbase, the price on Bithumb crashed violently, briefly touching 81 million Won (approximately $55,000).
Arbitrage traders and bots quickly capitalized on the discrepancy, exacerbating the volatility. The massive sell-off created a "wick" on the charts that will likely be studied by market analysts for years to come as a prime example of crypto operational risk in centralized exchanges.
Recovery Efforts: Freezing Funds and Damage Control
Bithumb's security team identified the anomaly within minutes of the distribution. In a desperate bid to stem the bleeding, the exchange suspended all withdrawals and trading services for the affected accounts roughly 35 minutes after the glitch occurred. This rapid response appears to have saved the company from total insolvency.
As of February 8, Bithumb reports that it has successfully recovered 99.7% of the erroneously distributed funds. The exchange effectively rolled back the ledger entries for the phantom Bitcoin that had not yet been withdrawn on-chain. However, a small portion of the funds—approximately 125 BTC, valued at nearly $9 million—was successfully withdrawn or liquidated before the freeze could be implemented. Bithumb has announced it will cover this $9 million loss using corporate reserves to ensure no customer funds are compromised.
Regulatory Scrutiny in South Korea
This South Korea cryptocurrency news has drawn immediate and sharp attention from financial regulators. The Financial Services Commission (FSC) and the Financial Supervisory Service (FSS) have launched an emergency review of Bithumb's internal control systems. Authorities are particularly concerned with how a single "fat finger" error could bypass verification protocols for such a colossal sum.
The incident comes at a sensitive time for the South Korean crypto market, which is known for its high retail participation and the "Kimchi Premium." Regulators have warned that this accidental BTC transfer could lead to stricter oversight mechanisms for all domestic exchanges, potentially mandating multi-signature approvals for all promotional distributions in the future.
Lessons in Crypto Security
The Bithumb incident serves as a stark reminder of the fragility of digital asset infrastructure when human error is introduced. While Bithumb exchange security against external hackers has remained robust, the internal threat of operational negligence proved far more dangerous. For the broader industry, the event highlights the critical need for automated "sanity checks" in transaction processing systems—software safeguards that would automatically flag and block a $40 billion transfer that exceeds an exchange's total assets.
For now, markets have stabilized, with Bitcoin reclaiming the $71,000 level as the new week begins. But for the 695 users who were briefly billionaires this weekend, and for the executives at Bithumb, the shock of the 2,000 BTC error will not soon be forgotten.
