CZ: Binance Assisted in Resolving Bithumb Airdrop Incident

South Korean cryptocurrency exchange Bithumb accidentally sent more than 620,000 bitcoins—worth about $44 billion—to 695 customers as part of a promotional event on February 5. The exchange said it had planned to distribute small cash rewards of 2,000 Korean won ($1.40) to each user, but instead sent large bitcoin amounts by error.

Bithumb said it recovered 99.7% of the mistakenly distributed bitcoins within 35 minutes and restricted trading and withdrawals for the affected users. The incident caused a brief 17% selloff in bitcoin prices on the platform, though prices later recovered. The exchange emphasized that the error was unrelated to hacking or security breaches.

Binance co-founder Changpeng Zhao (CZ) responded to speculation that Binance played a role in triggering the recent selloff, calling the claims 'fear, uncertainty, and doubt' (FUD). He clarified that Binance had no intention to manipulate the market and that the exchange only moved funds when users initiated withdrawals.

Why the Move Happened

Bithumb's accidental bitcoin distribution stemmed from a technical error during a planned promotional event. The exchange intended to distribute small cash rewards but mistakenly sent large amounts of bitcoin instead. The error exposed vulnerabilities in virtual asset systems, according to South Korean financial regulators.

Binance's CZ also addressed the broader narrative that Binance contributed to the market selloff in recent weeks. He denied that the exchange dumped bitcoin to trigger the price drop and stated that the funds in question belonged to users trading on the platform.

How Markets Responded

Bitcoin prices briefly slumped 17% on Bithumb following the error, but recovered to trade at 104.5 million won by Saturday. The incident did not have a lasting impact on the broader bitcoin market, which remained volatile in February 2026.

Zcash (ZEC) saw a recovery above $240, with double-digit gains reported as the broader crypto market stabilized. ZEC was up over 31% from its intraday low at $185, though traders remained cautious due to weak derivatives market activity.

What Analysts Are Watching

Market participants are closely monitoring Bithumb's handling of the incident and the potential regulatory response from South Korean authorities. The Financial Services Commission said it would launch on-site inspections of Bithumb and other exchanges if irregularities were found.

CZ's response to market speculation highlights the ongoing debate over Binance's role in recent price volatility. He reiterated that the exchange was not responsible for triggering the selloff, and that the majority of funds moved were user-initiated.

Zcash traders are also watching open interest (OI) levels and liquidation patterns. Zcash's futures OI fell to $335 million, suggesting a lack of confidence in the token's ability to sustain an uptrend. The Relative Strength Index (RSI) on the daily chart is rising, signaling fading bearish momentum.

Investors are also tracking regulatory developments in the U.S. and South Korea. House Democrats are investigating a controversial $500 million deal involving a Trump-linked crypto firm, which has added to market uncertainty.

The crypto market remains in a fragile state, with Bitcoin struggling to regain its November 2024 highs. The October 10, 2025 flash crash—triggered by Trump's tariff announcement— continues to influence investor sentiment.