South Korea Investigates Bithumb Over $4B “Ghost Bitcoin” Error

South Korea has launched a full investigation into Bithumb, the country’s second-largest crypto exchange. The probe comes after the exchange accidentally distributed far more Bitcoin than it actually held.

What Happened With Bithumb

During a recent promotion, Bithumb intended to award users 620,000 KRW each. However, due to a critical system error, the platform mistakenly sent out 620,000 BTC to 249 users. For context, the exchange only held 46,000 BTC at the time.

This error caused immediate confusion and chaos. Some users traded the “ghost” coins, creating market distortions. The mistake led to forced liquidations and reportedly unrecovered losses of about 13 billion KRW.

Regulators Step In

The Financial Supervisory Service (FSS) announced on February 10, 2026, that it would examine Bithumb’s internal controls and investigate whether any fraud occurred. The regulator aims to understand how such a huge error could happen and to prevent similar incidents in the future.

Officials emphasized the need for transparency. They said exchanges must maintain strict safeguards, especially when handling digital assets worth billions of dollars.

Implications for South Korea’s Crypto Market

This scandal highlights weaknesses in cryptocurrency exchange operations. Even well-known platforms like Bithumb remain vulnerable to technical mistakes. As a result, experts are calling for stricter regulations and stronger auditing measures.

South Korea’s crypto sector has grown fast over the past decade. Yet, repeated scandals like this one may undermine user trust. Investors could become more cautious, potentially slowing the adoption of digital currencies in the country.

Lessons for the Industry

Industry observers say the incident serves as a warning. Exchanges must prioritize system security and risk management. In addition, clear policies should guide how to handle accidental distributions or “ghost” tokens.

For users, the event underscores the importance of choosing platforms with strong safeguards. Meanwhile, regulators are likely to increase oversight to protect both traders and the market’s reputation.

Ultimately, Bithumb’s “ghost Bitcoin” incident is a stark reminder of the risks in a fast-moving crypto ecosystem. It also shows that even small errors in code or accounting can have multi-billion-dollar consequences.