South Korean legislators are increasing pressure on financial authorities after the cryptocurrency exchange Bithumb mistakenly issued Bitcoin credits to users that it did not actually own, resulting in a brief market sell-off and raising questions about the regulatory framework governing the nation’s burgeoning digital asset sector.
Critics have argued that the Financial Services Commission (FSC) failed to identify serious issues within Bithumb’s systems despite conducting at least three reviews since 2022, as reported by The Korea Times.
Representative Kang Min-guk from the People Power Party emphasized that this situation is beyond a mere technical error, pointing to fundamental weaknesses in cryptocurrency governance, including regulatory gaps.
On February 6, Bithumb erroneously credited users with 2,000 Bitcoin (BTC) instead of 2,000 Korean won ($1.40) during a promotional campaign, leading to a total of 620,000 Bitcoin being distributed that the platform lacked.
Call for Action as FSC Delays Investigation
With the FSC’s investigation into Bithumb delayed, lawmakers’ dissatisfaction has surged. The investigation was initiated on February 10, with officials ensuring stringent measures against destabilizing market activities.
Originally set to conclude on February 13, the examination was extended, with an aim to finalize findings by the end of February, citing the necessity of further scrutiny, according to various local reports.
Previous Payout Mistakes by Bithumb
The FSC’s evaluation includes not just the recent Bitcoin mishap but also two earlier payout issues.
“There were two past instances where coins were erroneously distributed and later retrieved, but these were trivial amounts,” asserted Lee Jae-won, CEO of Bithumb, during an emergency session on February 11.
In the recent error, Bithumb claimed they managed to recover the majority of the incorrectly credited funds, reporting that only 125 BTC ($8.6 million) from the miscredited 620,000 BTC remain unrecouped.
Ongoing Concerns Regarding Crypto Management in South Korea
This incident raises broader concerns over how South Korea manages its cryptocurrency assets. In 2021, 22 BTC valued at around $1.5 million vanished from a cold storage wallet during an audit at the Gangnam Police Department in Seoul.
Additionally, in August 2025, 320 BTC reportedly disappeared from the Gwangju District Prosecutors’ Office due to a compromised password. It was only disclosed recently that the full amount had been recovered after the hacker returned the funds, drawing skepticism as this revelation coincides with the ongoing FSC inquiry into Bithumb.
Industry watchers and lawmakers highlight that these occurrences reflect systemic vulnerabilities in regulatory oversight and the management of digital assets.
