Bithumb Accidentally Sends 2,000 BTC to Users, Triggers Market Sell-Off

Bitcoin (BTC) experienced a sharp price drop on South Korean exchange Bithumb after an internal accounting error. The exchange mistakenly credited users with 2,000 BTC instead of a small reward. The error created inflated balances in hundreds of accounts.

The sudden influx of phantom BTC led to immediate selling pressure. Users who saw large balances in their accounts quickly tried to cash out. This triggered a sharp selloff on Bithumb's BTC/KRW pair.

Bithumb identified the error and acted quickly to restrict trading. The exchange said prices on its platform normalized within about five minutes. It added that no bitcoin was moved onchain and that customer assets remained secure.

Why Did the Flash Crash Happen?

The incident originated from a major internal accounting mistake. Instead of rewarding users with 2,000 Korean won, Bithumb credited them with 2,000 BTC. The error created tens of millions of dollars' worth of phantom bitcoin appearing in user accounts.

The exchange's internal controls detected the abnormal transactions. Bithumb restricted trading in the affected accounts shortly after. No external hack or security breach was involved in the incident.

How Did the Market React?

Bitcoin's price on Bithumb dropped 15.8% below other exchanges during the incident. At one point, BTC traded at 81 million won ($55,000). Other exchanges maintained relatively stable prices.

The selloff was short-lived. Bithumb's liquidation prevention system operated as intended. The exchange said no cascading forced liquidations occurred as a result of the price movement.

What Are Analysts Watching Next?

The incident highlights the vulnerability of centralized exchanges. Even a minor internal error can trigger significant market volatility. Analysts are watching to see if Bithumb will implement additional safeguards.

The flash crash also raises questions about user behavior. Users who saw inflated balances acted immediately to sell. This behavior suggests that retail traders may react impulsively to large, unexpected account changes.

Bithumb's response was swift. The exchange said it acted to stabilize the situation within five minutes. The incident was contained without long-term damage to the market or customer assets.