In the virtual asset exchange industry, the reaction to Bithumb mistakenly paying 620,000 bitcoins worth 62 trillion won to customers is that it is an "accident that is hard to comprehend." Some also noted that while Bithumb was ramping up marketing to catch up with Upbit, the No. 1 virtual asset exchange, it paid no attention at all to internal controls.
According to financial authorities on the 10th, the Financial Supervisory Service recognized Bithumb's mispayment incident on the 7th and immediately launched an on-site inspection. The Financial Supervisory Service will look into whether systems are in place to block abnormal transactions and whether internal control systems are established, and plans to shift to a full inspection for an in-depth probe.
The incident occurred when Bithumb entered the payout unit as "bitcoin" instead of "won" while paying 2,000 to 50,000 won to winners of a promotion. Typically, when a virtual asset exchange pays out promotion allotments, the promotion manager finalizes the list of winners and the payout amount and uploads it to the internal management system. Because company funds are involved in the expenditure process, this is cross-checked with a finance team manager. Once verification is complete, the payment is made with approval from a senior manager.
In the virtual asset industry, some said it would have been difficult for a mispayment on this scale to occur if these steps had been followed properly. That is because at least three people—the promotion manager, the finance team manager, and a senior manager—failed to check properly.
The system that allowed payouts of more than 10 times the amount of bitcoin Bithumb holds (about 46,000 coins, including customer consignment) is also being flagged as a problem. Around 2018, when discussions to revise the Act on Reporting and Using Specified Financial Transaction Information related to virtual assets began in earnest, the industry warned about systems to prevent virtual asset transactions for assets not held by the exchange.
Gopax built a block system from the time the exchange was designed, and Upbit created one in 2017; other exchanges are said to have implemented similar systems since. The industry's view is that Bithumb also had a block system, but it likely did not function properly.
Bithumb realized the mistaken payout of 620,000 bitcoins about 35 minutes after sending them. Some customers who received the bitcoin sold immediately, sending the price briefly plunging to the 81 million won range. Some also noted that if a proper transaction monitoring system had been in place, abnormal transactions could have been identified and blocked immediately to prevent the incident.
An exchange official said, "Normally, if you input a payout that exceeds the amount held, the system prevents the transaction itself from going through. Also, if patterns of deposits and withdrawals that exceed normal volumes or appear abnormal are detected, an emergency check can be conducted immediately."
In the industry, there is criticism that as Bithumb prepared for an initial public offering (IPO) targeted for the first half of this year, it focused only on market share and failed to maintain basic internal controls and system safety.
According to the Financial Supervisory Service's electronic disclosure system, Bithumb's operating expense in the third quarter of last year (July–September) was 125.9 billion won, up 107% from 60.8 billion won a year earlier. Of that, sales promotion expenses rose 155% from 21.8 billion won to 55.6 billion won, and advertising expenses climbed 237% from 2.7 billion won to 9.1 billion won. The random box reward Bithumb executed this time is included in advertising expenses as a promotion payout expenditure.