Key Takeaways
- Bithumb is suing to get back the last 7 Bitcoin from its big payout mistake.
- In February, the exchange accidentally gave users $40 billion in BTC.
- Bithumb recovered most coins quickly, and courts are now helping recover the rest.
South Korean cryptocurrency exchange Bithumb has stepped up efforts to recover funds following a major operational error.
It has filed for a provisional court order to seize seven Bitcoins still held by users.
The case stems from its February 2026 payout mistake, valued at around $40 billion.
The move marks the latest chapter in one of the most extraordinary fat-finger incidents in crypto history, where a simple input mistake briefly turned ordinary customers into multi-millionaires and sent shockwaves through global markets.
Bithumb Launches Legal Process To Recover Remaining 7 BTC
As of April 2026, Bithumb has turned to legal channels after internal recovery efforts and voluntary returns fell short.
The exchange recently initiated provisional seizure proceedings in South Korean courts to reclaim seven Bitcoin.
These coins were mistakenly distributed during the February promotional event.
At the time, the seven BTC were worth about 700 million won, or roughly $500,000.
Bithumb had already recovered 99.7% of the 620,000 BTC mistakenly credited to around 695 user accounts.
The exchange is now targeting the remaining funds through formal legal action.
According to local reports, Bithumb initially contacted recipients directly and used account freezes to recover most assets.
Most users cooperated, or the exchange clawed back balances before withdrawals were completed.
However, a portion of funds, initially estimated at 125 BTC, was sold or transferred. Those assets were worth about $9 million at the time.
Bithumb covered the shortfall using its own reserves and compensated affected users at 110% of their losses.
Despite repeated demands, seven BTC remain unreturned.
The legal action is based on claims of unjust enrichment. Bithumb argues that recipients have no legal right to retain the funds mistakenly transferred to them.
Legal experts note that South Korean courts have previously ordered restitution in similar cases.
The filing signals Bithumb’s intent to recover all remaining assets and reinforce operational accountability.
The case also comes amid increased scrutiny from South Korea’s Financial Services Commission.
The regulator has already flagged internal control weaknesses at Bithumb following the incident.
How the $40 Billion Mishap Unfolded and the Aftermath
The fiasco began on Feb. 6, during a routine promotional “random box” event intended to reward new or qualifying users.
Bithumb intended to distribute a modest total of 620,000 Korean won, roughly $425–$428, across 249–695 participants.
Instead, a staff member entered the reward amount in Bitcoin rather than KRW, triggering an internal ledger credit of 620,000 BTC to user accounts.
Critically, these were “ghost” Bitcoin ledger entries not backed by actual on-chain holdings. Bithumb’s actual Bitcoin reserves were far smaller, estimated at around 43,000 BTC.
Within minutes, some recipients spotted the windfall and began selling, causing a localized flash crash on Bithumb’s platform: Bitcoin’s price plunged 17% to roughly $55,000 before stabilizing.
Bithumb acted swiftly. Within 35 minutes, the exchange restricted trading and withdrawals for all affected accounts. It recovered 99.7% of the miscredited BTC directly from frozen balances.
For the small fraction already sold (approximately 1,788 BTC initially), Bithumb injected its own funds to make customers whole, ensuring no net loss to user deposits.
CEO Lee Jae-won issued a public apology, assuming full responsibility, and announced compensation:
- 20,000 KRW per active user at the time.
- Waived trading fees.
- 110% refunds for those impacted by the price dip.
The company stressed that the error was purely operational, that no hacking or security breach was involved, and that it would implement enhanced “fat-finger” safeguards by late March 2026.
The incident exposed deeper system vulnerabilities, prompting FSC inspections and industry-wide regulatory reviews.
Bithumb admitted its internal controls had been susceptible to such errors, leading to calls for stricter protocols across South Korea’s “Big Five” exchanges.
Notable Fat-Finger Incidents in Crypto History
Bithumb’s blunder is not an isolated incident in the crypto space, where human error and high-stakes digital assets have repeatedly produced headline-grabbing mishaps.
In 2021, U.S. lending platform BlockFi made a similar promotional mistake, accidentally crediting users with Bitcoin rather than the stablecoin GUSD.
Some recipients received up to 700 BTC; while most returned the funds voluntarily, roughly 100 users retained them, contributing to reputational damage and ultimately leading to BlockFi’s bankruptcy in 2022.
Other notable cases include a 2024 Uniswap trader’s MEV “fat-finger” loss of $700,000 due to a poorly executed swap with incorrect parameters.
In 2025, stablecoin issuer Paxos accidentally minted $300 trillion worth of PYUSD due to a catastrophic input error, though the tokens were never issued on-chain and were quickly voided.
Earlier examples, such as erroneous high-value transfers on centralized exchanges, have also forced platforms to pursue civil recoveries or absorb losses.
These incidents highlight persistent risks in centralized crypto platforms: reliance on manual inputs, ledger-accounting mismatches, and the speed of digital markets.
Regulators worldwide increasingly demand multi-factor confirmations, automated unit checks, and real-time anomaly detection to prevent repeats.
For Bithumb, the lingering legal fight over the seven BTC serves as a cautionary tale—and a reminder that, even in the blockchain, some mistakes still require old-school courtroom remedies to resolve.
Prashant Jha is a seasoned crypto journalist based in Delhi, India, with a Bachelor’s Degree in Computer Science Engineering. Passionate about the evolving world of blockchain and cryptocurrencies, he has been a dedicated voice in the industry since 2018. Prashant’s expertise lies in regulatory reporting, where he unravels complex legal and financial developments with clarity and precision. Before joining CCN in 2024, he honed his craft at Cointelegraph, establishing himself as a trusted name in crypto journalism.
His coverage spans major industry events, including the high-profile collapses of FTX, Three Arrows Capital (3AC), and LUNA, offering readers insightful analyses of their regulatory and market implications. Prashant’s technical background enables him to bridge the gap between intricate blockchain technology and its real-world applications, making his work accessible to novices and experts.
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