Cryptocurrency exchange Bithumb has begun a provisional seizure process to recover seven of the 620,000 bitcoins it mistakenly paid out during an event in Feb., which it ultimately failed to retrieve. At the time of the erroneous payout, the seven bitcoins were worth 700 million won.
According to reporting compiled by ChosunBiz on the 9th, Bithumb recently filed for a provisional seizure to get back bitcoins it failed to recover after the erroneous payout incident. A provisional seizure is a measure in which, before a creditor files a lawsuit to get money back, the court temporarily freezes a debtor's assets to prevent them from being hidden or disposed of. Filing for a provisional seizure means a civil lawsuit will follow.
Earlier, on Feb. 6, Bithumb intended to pay a total of 620,000 won to 249 event winners, with 20,000–50,000 won each, but it mistakenly entered "bitcoin" instead of "won" and paid out 620,000 bitcoins. That amounted to 62 trillion won. Bithumb canceled the payments after several minutes, but some customers sold the bitcoins for cash or bought other crypto assets, leaving 12.3 billion won worth of bitcoin unrecovered.
Afterward, the company contacted the customers individually and recovered a substantial portion, but some customers have refused to return the funds to the end. A senior industry official said, "Some customers refused to return it, saying, 'It was the company's mistake, so why should I give the money back?'"
With the start of a provisional seizure, if litigation proceeds, legal circles broadly believe customers who did not return the mistakenly paid bitcoins are likely to lose. Lee Chan-jin, head of the Financial Supervisory Service and a former attorney, said at a press briefing two months ago, "(The mistakenly paid bitcoins) are clearly subject to the return of unjust enrichment. Those who sold and converted them into money (cash out) face disaster (as they could be drawn into lawsuits)."
As a rule, mistakenly received bitcoins must be returned in kind. If the bitcoin price falls by the time of return, the customer could benefit, but if it surges, the customer could face heavy losses. When 620,000 bitcoins were mistakenly paid out in early Feb., the price of bitcoin on Bithumb temporarily fell to the low 80 million won range. The current price is in the 105 million won range. If someone sold at around 80 million won back then, they would have to buy back in the 100 million won range to repay.