On Friday, the price of Bitcoin on the South Korean exchange Bithumb crashed by approximately 10% of global markets. This happened after an airdrop error in which Bithumb distributed 620,000 Bitcoin to 695 users who were winners of a promotion. The crypto exchange has already promised to reimburse customers who suffered losses from the crash, along with a 10% promotion.
Details Of The Bithumb Bitcoin Airdrop Error
According to a Yonhap News report, the issue occurred during a promotional airdrop on the exchange. One Bithumb employee was to distribute 2,000 Korean won (KRW) in prizes, but instead chose BTC.
The mistake resulted in the transfer of approximately 2,000 BTC to each of these users. Some of these users immediately sold these coins, causing an immediate downward effect on the BTC/KRW price on Bithumb.
Following the airdrop error, the BTC price on Bithumb crashed to around $55,000. However, its value was also down on other crypto platforms, yet it stayed over $66,000 at the time of the incident.
The company subsequently issued an official statement acknowledging the mistake. Bithumb claimed that it identified the airdrop error in a few minutes and acted swiftly to mitigate the harm, recovering almost all the coins it mistakenly distributed.
The exchange blocked the accounts and prevented further sales of these coins. The exchange confirmed that customers’ assets were not affected and that normal trading has now been reinstated.
Exchange To Reimburse Users
In a company announcement, Bithumb said it will reimburse customers who suffered losses, pledging to use corporate assets to cover any shortfall and fully restore balances. The exchange estimates total customer losses at around 1 billion won and said affected users will receive full compensation for their losses, plus an additional 10% bonus.
South Korea’s Financial Services Commission (FSC) confirmed it is reviewing the incident. The sell-off was linked to what authorities described as a large-scale misdelivery of Bitcoin on the exchange.
In response, financial authorities convened an emergency inspection meeting on Friday at the Government Complex in Seoul, chaired by FSC Vice Chairman Kwon Dae-young, with officials from the Financial Supervisory Service and the Financial Intelligence Unit in attendance.
Bithumb CEO Lee Jae-won issued a public apology, outlining the firm’s compensation plan. Kwon said regulators are treating the incident seriously, calling it an example of the risks and vulnerabilities inherent in virtual assets, and ordered a complete assessment of user damage alongside close monitoring of Bithumb’s compensation efforts.
Crypto Prices Recover
After the remedial actions, the price of Bitcoin on Bithumb rallied sharply. The BTC/KRW price rose to above 100 million won, bringing it in line with other global crypto platforms.
BTC price stood at about $68,800, increasing by over 5% in the last 24 hours at the time of writing, according to data on CoinMarketCap. Ethereum was up nearly 7% to trade at more than 2,000, XRP went up more than 9%, and Solana increased by more than 7%.
Notably, Bitcoin surged past $70 000 yesterday, providing optimism that the market meltdown could be ending. Moreover, there is a recent analysis by Galaxy Research and Bitwise that the market might be at a late stage of its correction.
As CoinGape reported, the rise in XRP price was also accompanied by several bullish fundamentals. These include the growth in whale accumulations and an increase in unique addresses on the XRP Ledger (XRPL).
