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A reward distribution error within the platform briefly caused a significant decline in bitcoin prices on South Korea’s Bithumb exchange after users were erroneously credited with substantial phantom balances.
Bithumb airdrops users 2,000 BTC (Photo by Daniel Bernard on Unsplash/Modified by CoinDesk)
Key points:
- Bithumb reported that users were erroneously credited with 2,000 BTC instead of a minor reward of 2,000 won during a promotion, resulting in substantial bitcoin balances that only appeared on the exchange’s internal ledger.
- Users sought to liquidate the credited amounts, causing bitcoin prices on Bithumb to plummet as much as 15.8% compared to other exchanges, with BTC momentarily trading around 81 million won ($55,000).
- The exchange indicated that it quickly restricted the affected accounts, prices stabilized rapidly, and the event was unrelated to any hacking or security compromise, ensuring customer assets remained safe.
Bitcoin experienced a sudden drop to $55,000 on Bithumb this week following what seems to be a significant internal accounting error.
Bithumb inadvertently credited users with 2,000 BTC each instead of a minor reward valued at 2,000 Korean won (approximately $1.50), as stated in a blog post released on Friday.
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This led to the appearance of tens of millions of dollars in phantom bitcoin across numerous user accounts. No bitcoin transactions occurred on-chain, and the inflated balances were only reflected in Bithumb’s internal records.
Users who suddenly found themselves with large balances quickly attempted to sell, initiating a sharp decline in Bithumb’s BTC/KRW trading pair, driving prices down 15.8% compared to other exchanges. At one point, BTC was priced at 81 million won ($55,000) while prices on other platforms remained largely unchanged.
Bithumb stated that it detected the unusual transactions through its internal monitoring systems and limited trading in the impacted accounts shortly after the event.
The exchange reported that prices on its platform returned to normal within approximately five minutes and that its liquidation prevention mechanisms functioned as planned, averting any forced liquidations related to the price drop.
The company further clarified that the incident was not tied to an external breach or security issue and that customer assets are secure.
