South Korean Lawmakers Slam Regulators Over Bithumb's $43 Billion Bitcoin Blunder

Decrypt

by Logan Hitchcock

February 20, 2026

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South Korean Lawmakers Slam Regulators Over Bithumb's $43 Billion Bitcoin Blunder

South Korean lawmakers are calling for stronger oversight after a massive $43 billion Bitcoin blunder at cryptocurrency exchange Bithumb went unnoticed by regulators despite multiple inspections. The error occurred earlier this month when 2,000 BTC—worth around $135 million at the time—was mistakenly credited to hundreds of user accounts instead of a small amount of Korean won as part of a promotional campaign. While the issue was rectified within minutes, it caused Bitcoin's price on Bithumb's exchange to drop sharply and resulted in losses for the firm. The incident has exposed significant weaknesses in South Korea's regulatory framework for cryptocurrencies. The Financial Services Commission (FSC) and the Financial Supervisory Service (FSS), which had reviewed Bithumb at least three times since 2022, failed to identify the structural flaw that led to the error. Lawmakers have criticized regulators for their lack of oversight and for shifting blame onto the exchange despite their supervisory role. The flash crash caused by the error highlights the risks of technical glitches in crypto exchanges and their potential impact on market stability. Although Bithumb managed to recover 99.7% of the erroneously distributed BTC, around $123 million worth remained missing. The firm has since implemented a compensation plan for affected users, including those who sold Bitcoin at artificially low prices. This case underscores the importance of robust regulatory oversight and secure systems in the crypto industry. It also raises questions about how regulators can better identify and address structural issues within exchanges to prevent similar incidents in the future. For crypto enthusiasts, this serves as a reminder of the need for vigilance and improved regulatory frameworks to protect investors and maintain market integrity.

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Originally published on Decrypt on 2/20/2026