Did a Hong Kong fund kill Bitcoin? Bithumb’s ‘phantom’ BTC: Asia Express

CoinTelegraph

by Yohan Yun

February 9, 2026

AI-Generated Deep Dive Summary

The cryptocurrency world has been shaken by two unusual incidents: South Korean exchange Bithumb distributing "phantom" Bitcoin worth billions and a viral theory linking a Hong Kong fund to a Bitcoin ETF sell-off. These events have sparked questions about market stability, regulatory oversight, and the risks of leveraged trading in crypto markets. Bithumb's error occurred during a promotional campaign, where users were mistakenly sent over 620,000 BTC—worth nearly $42.5 billion at current prices. The exchange reported holding only around 42,031 BTC in its mid-year filing, yet it distributed 15 times more Bitcoin than it actually possessed. While most of the assets were recovered, some users managed to sell or transfer the "non-existent" coins before Bithumb could reclaim them. This incident has raised concerns about the exchange's internal controls and compliance with South Korea's strict crypto regulations, which mandate platforms to hold user assets securely. Meanwhile, a viral theory suggests that a Hong Kong fund using cheap Japanese yen funding may have caused significant liquidations in Bitcoin ETFs, particularly the BlackRock IBIT ETF. This fund is believed to have bet on Bitcoin's rebound by leveraging yen-denominated positions, only to face forced unwinds as market conditions worsened. The sell-off coincided with a broader margin unwind across asset classes tied to yen funding, also impacting silver prices. While this theory remains unproven, it highlights the risks of leveraged trading and the potential for large-scale liquidations to ripple through markets. These incidents underscore the volatility and regulatory challenges facing the crypto industry. Bithumb's "phantom" Bitcoin case not only exposed operational vulnerabilities but also drew attention to South Korea's stringent oversight framework. The Hong Kong fund theory, though speculative, points to the interconnected risks of leveraged trading across global markets. For readers interested in crypto, these events highlight the importance of understanding market dynamics, regulatory safeguards, and the potential for human error or flawed strategies to disrupt even the

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Originally published on CoinTelegraph on 2/9/2026