South Korean Crypto Exchange Bithumb said it mistakenly distributed Customers received more than $400 billion in Bitcoin during an event to reward them, which caused a price spike last week.
Exchange officials said that the mistake occurred because a plan to give away small amounts of cash was not processed correctly. The exchange said that instead of being awarded about 2,000 Korean dollars, users were given at least 2,000 Bitcoins each.
It is an error resulted The accidental distribution of 620,000 Bitcoins valued at $44 billion, at the current price.
Bithumb apologized It apologized and reported that 99.7% (of the Bitcoin) was recovered. After the error was made, 695 clients were restricted from trading or withdrawing their funds.
“We would like to make it clear that this incident is unrelated to external hacking or security breaches,” Bithumb made a public statement. “There are no problems with system security or customer asset management.”
Reports said that despite the rapid response, a few recipients had sold or traded coins before the restrictions were implemented. Bithumb told Local media reported that it still had not recovered the 125 Bitcoins, which are worth about $9 million. They were stolen from a very small number of clients.
Exchange said that it will cover the remaining losses with its corporate funds.
Bithumb Bitcoin disruptors
The Bitcoin exchange platform was immediately disrupted by the incident. Bithumb charts showed that Bitcoin fell briefly by 17%, to approximately $55,000 or 81.1 millions won (roughly $81,000), before it recovered. Price later recovered to 104,5 millions won.
Financial regulators in South Korea reacted swiftly. Financial Services Commission officials said that this incident showed vulnerabilities in the sector of virtual assets. Officials have said that they are reviewing internal controls at domestic exchanges. If irregularities are discovered, on-site investigations will be conducted.
South Korean newspaper Kookmin Ilbo reported Bithumb had been inspected by regulators on 7 February. According to reports, investigators requested the list of authorized employees who could issue crypto-payments.
Newspapers cited anonymous sources that described the event as shocking. “structural vulnerabilities” Exchanges are involved in operational processes.
Bithumb’s internal system, according to reports, allowed its employees, in addition to issuing loyalty points and Korean won without formal settlement procedures. This increased the chance of errors.
They acknowledged the shortcomings. Hwang Seung Wok, Vice President of Exchange Business Division, sent an email to staff. said The mistake revealed weaknesses in company processes.
“The fact that a single error in setting an event reward unit can destabilize an entire crypto exchange demonstrates the current state of our systems,” He wrote. He stated that the focus of his company was to eliminate oversight mistakes rather than blame individuals.
Bithumb Compensation Plan
Bithumb has announced compensatory measures for those customers who were affected by the abnormal trading conditions that occurred during this incident.
Exchange said that users who had sold Bitcoin at low rates during the disruptions would be paid the entire amount of the sale plus an extra 10%. Bithumb has also announced that all fees will be waived for the next seven days on its markets.
The company has offered to reimburse customers for the money they spent on the platform during the event.
This error occurs at a time when the exchange is under pressure. This exchange had been working on plans to be the first South Korean cryptocurrency exchange to list in the United States by the end of this year.
This month, the South Korean consumer protection agency released a report. launched A probe of Bithumb’s claims about marketing.
Bithumb’s current focus is on damage control. Users who have lost money due to panic sales during the glitch will be compensated by Bithumb. The exchange also announced that they will be reviewing and upgrading their internal systems for future error prevention. Specific details on the fixes are still pending.
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Source: bitcoinmagazine.com
