A promotional campaign by the South Korean crypto exchange Bithumb has gotten completely out of hand. Due to a technical error, some users received not a small amount of won, but hundreds of millions of dollars worth of Bitcoin (BTC). The chaos led to panic selling, a local price drop of fifteen percent and intervention by regulators.
During a so-called “Random Box” event, participants could win prizes worth several thousand Korean won, the equivalent of about one and a half dollars. But due to an internal mistake, some accounts were suddenly credited with as much as two thousand Bitcoin (BTC). That amounts to hundreds of millions of dollars per person.
The error was quickly spotted and went viral on social media. Blockchain analysts shared examples of wallets suddenly containing huge amounts of BTC.
Bitcoin price plummets locally on Bithumb
Several lucky recipients didn’t wait a second and immediately sold their unexpected BTC on Bithumb. As a result, the Bitcoin price on the platform suddenly fell by about fifteen percent, much more sharply than on other exchanges.
The deviation between the Bithumb price and the global market led to panic among traders. The exchange’s internal system acted quickly to freeze accounts and limit trading opportunities.
No hack, but investigation into the loss of millions
According to Bithumb, this is an internal error, not a hack or security breach. Automatic risk management systems would have prevented a wider chain reaction. Still, a number of users managed to quickly send their Bitcoin to banks, generating more than two million dollars in payouts.
South Korean regulators, including the Financial Services Commission, have launched an official investigation into the incident and its handling.
Bithumb apologizes
The exchange has since publicly apologized. According to the company, there would be no lasting damage to customers. Nevertheless, the incident puts serious pressure on the reliability of the platform.
The incident highlights how one technical error on a major crypto exchange can lead to extreme price movements, market disruption and government intervention.
Source: https://newsbit.nl/zuid-koreaanse-crypto-beurs-geeft-per-ongeluk-miljarden-weg-in-bitcoin/
