Crypto asset exchange Bithumb is found to have forced liquidations of users of its coin collateral lending service after mistakenly paying out 620,000 bitcoins worth 62 trillion won.
According to the crypto asset industry and financial authorities on the 10th, as the mistakenly paid bitcoins poured into the market on the 6th, when the error occurred, the bitcoin price plunged, and forced liquidations due to collateral value declines occurred in 64 accounts that were using the lending service. The damage is known to be at least several hundred million won.
The lending service is a service that seeks additional revenue by borrowing coins using held assets as collateral. As the mistakenly paid bitcoins flooded the market on the day of the incident, the price, which had been in the 95 million won range, plunged at one point to 81.11 million won. As the valuation of the bitcoins pledged as collateral fell sharply, it appears forced liquidations proceeded for failing to meet the maintenance margin requirement.
Bithumb announced that the directly incurred customer losses related to this incident were around 1 billion won, but with forced liquidation cases confirmed, consumer damages are expected to grow. Bithumb said it will fully compensate customer losses.