At cryptocurrency exchange Bithumb, a mishap occurred in which a large amount of bitcoin was wrongly paid out during the process of distributing event rewards, but it was confirmed that Bithumb has not yet taken legal action involving enforcement power, such as provisional seizure, against the recipients of the mistaken payments.
The total amount of bitcoin wrongly paid out in this incident came to 620,000 BTC (about 60 trillion won). After recognizing the payment error, Bithumb began a recovery process, but as of the 7th, 125 BTC had yet to be recovered. In value, that amounts to about 12.3 billion won.
Given the unusually large scale of the mistaken payouts and the delay in recovery, some in the industry say there is a possibility the matter could lead to legal disputes down the line. Bithumb is said to be proceeding with recovery mainly through voluntary returns.
According to a compilation of ChosunBiz reporting on the 10th, Bithumb has not initiated separate legal procedures, such as filing for provisional seizure, against recipients of the mistaken payouts. A Bithumb official said, "Rather than taking legal action immediately, we are contacting the customers individually and trying to persuade them through conversation to return the funds." Bithumb said that for now it is prioritizing handling the incident, compensating victims, and communicating with financial authorities.
According to financial authorities, about 3 billion won of the unrecovered amount was withdrawn to personal accounts after selling bitcoin, and roughly 10 billion won was reportedly used to repurchase altcoins within the Bithumb exchange.
The problem is that once the cash proceeds move into personal accounts, it is difficult for an exchange to unilaterally restrict withdrawals or transfers. It also cannot arbitrarily block deposits and withdrawals on bank accounts.
The legal community views this case as akin to a typical bank "erroneous remittance." An erroneous remittance refers to a case in which the remitter, contrary to intent, designates the wrong recipient, amount, or quantity and transfers an asset. In civil terms, the key issue is whether it constitutes unjust enrichment.
Attorney Choi Young-no of Barun Law said, "Holding virtual assets paid out by mistake constitutes a benefit without cause, which gives rise to an obligation to return," adding, "Virtual assets are also subject to claims for the return of unjust enrichment."
Financial Supervisory Service Governor Lee Chan-jin also said at a meeting the previous day, "Even if you received mistakenly paid coins and sold or cashed them out, you are obligated to return the original assets."
While there is little disagreement over the obligation to return, some note that whether recovery is actually possible is a separate issue. In particular, if about 3 billion won that was transferred to personal accounts is withdrawn or spent, there may be no effective way to stop it, which is seen as a burden.
If legal recovery is pursued, the crux is "asset freeze," according to a common view in the legal community. Once accounts are frozen, Bithumb can recover funds through compulsory execution after the lawsuit concludes.
Attorney Lee Jun-cheol of Surloon Asia said, "The most urgent step is an asset freeze," adding, "Bithumb already holds member information, so it can consider freezing won points or other held assets remaining within the exchange first." He added, "If cash has moved to bank accounts or assets such as real estate are confirmed, parallel freezing procedures can also be pursued."
Lee said, "The next step is litigation," explaining, "You would claim the return of the bitcoin that was wrongly paid in court, and if it has already been disposed of, you can also demand a monetary return equivalent to the market price at the time." This would require return in bitcoin, or if that is impossible, repayment in money.
Some users believe they could avoid responsibility through bankruptcy or rehabilitation proceedings, but the legal community sees that as unrealistic.
Lee said, "If someone applies for bankruptcy after disposing of or reducing assets despite knowing there is an asset to be returned, separate criminal issues may arise," adding, "Bithumb can participate as a creditor in the bankruptcy process, or a trustee can track and recover concealed assets." Depending on the case, the debt may remain as "a non-dischargeable obligation," he said.