South Korea's National Assembly has convened an emergency plenary session today, February 11, 2026, to address a catastrophic Bithumb Bitcoin error that saw the exchange accidentally distribute approximately $42 billion worth of cryptocurrency to users. The unprecedented hearing, led by the Political Affairs Committee, begins just moments from now as lawmakers grill exchange executives and financial regulators over the massive operational failure. While Bithumb has managed to claw back the vast majority of the funds, the incident has triggered a full-scale FSS Bithumb investigation and left nearly $9 million in Bitcoin unrecovered, raising serious questions about the stability of the nation's crypto infrastructure.

The $42 Billion 'Fat Finger' Nightmare

The chaos began on February 6, 2026, during a routine promotional event intended to reward users with small amounts of Korean Won. In a colossal "fat finger" mistake, an employee reportedly entered "BTC" instead of "KRW" into the distribution system. Instead of receiving a modest 2,000 to 50,000 won (approximately $1.40 to $35), 695 users were credited with 2,000 Bitcoin each.

The total erroneous distribution amounted to roughly 620,000 Bitcoin—a figure that far exceeds Bithumb's actual reserves and represents nearly 3% of the total circulating Bitcoin supply. This massive injection of "ghost coins" onto the internal ledger caused immediate havoc. As users rushed to liquidate their windfall, the price of Bitcoin on the exchange flashed crashed by nearly 17%, temporarily decoupling from global averages before trading was frozen.

"Ghost Coins" and Internal Control Failures

A core focus of today's South Korea crypto hearing is the issue of "ghost coins"—digital assets that exist only as ledger entries without backing on the blockchain. Financial Supervisory Service (FSS) Governor Lee Chan-jin has publicly criticized the exchange's internal controls, questioning how a system could allow the distribution of assets that did not exist in the exchange's wallets. The incident has exposed a critical vulnerability in how centralized exchanges manage user balances versus actual on-chain custody.

Missing Funds and Legal Threats

Despite the magnitude of the Bithumb 42 billion mistake, the exchange acted swiftly to freeze accounts and reverse the transactions. Bithumb reports that it has successfully recovered 99.7% of the erroneously distributed assets. However, approximately 125 Bitcoin—valued at roughly $9 million—remains missing after customers withdrew or sold the funds before the freeze could take effect.

Bithumb has pledged to cover these losses from its own corporate reserves to protect customer assets. Meanwhile, legal experts warn that users who cashed out the accidental windfall could face criminal charges under the principle of "unjust enrichment." Authorities are urging these users to return the funds voluntarily to avoid prosecution, citing legal precedents involving erroneous bank transfers.

FSS Escalates Investigation

The fallout has triggered an aggressive regulatory response. The Financial Supervisory Service (FSS) escalated its initial on-site inspection to a full-scale investigation as of yesterday. Investigators are currently seizing transaction logs and internal communication records to determine if the FSS Bithumb investigation will lead to sanctions for violating the Virtual Asset User Protection Act.

Regulators are particularly concerned with:

  • Why the internal system did not flag a transaction exceeding the exchange's total assets.
  • The delay between the erroneous distribution and the trading freeze (approx. 35 minutes).
  • Whether insider trading occurred during the price crash.

Market Reaction: Bitcoin Price Rebound News

The incident occurred amidst a broader volatility in the crypto market. Following a sharp dip earlier in the month, global markets are seeing positive Bitcoin price rebound news. While Bithumb's internal price momentarily collapsed, the global average has remained resilient, with Bitcoin reclaiming the $68,000 level this week. Analysts suggest that while the Bithumb operational failure is severe, it has not dampened the broader institutional demand driving the current recovery.

However, the crypto exchange recovery 2026 narrative is now complicated by fears of tighter regulation. Market participants are watching closely to see if South Korea, a major hub for crypto trading, will implement draconian measures that could stifle innovation in the name of security.

Future of Cryptocurrency Regulation 2026

Today's hearing is expected to set the tone for cryptocurrency regulation 2026 in South Korea. Lawmakers are likely to demand real-time proof of reserves and stricter "circuit breaker" mechanisms for all domestic exchanges to prevent a recurrence. The incident serves as a stark reminder that despite the maturity of the asset class, the infrastructure supporting it remains prone to human error.

As the hearing progresses throughout the day, the crypto world waits to see if Bithumb will face fines, suspension, or mandated structural changes that could reshape the industry landscape in Asia.