Bithumb, a major South Korean cryptocurrency exchange, has initiated legal proceedings to reclaim seven Bitcoin still outstanding from a significant payout error that occurred in February. The exchange filed for a provisional attachment, a court-sanctioned measure that freezes a defendant’s assets in advance of a civil lawsuit. The move targets users who have declined to return the mistakenly distributed funds, according to a report by local outlet Chosun Biz.
The incident took place on February 6, when Bithumb intended to distribute a total of 620,000 Korean won — approximately $420 — among 249 winners of a promotional event. Due to an input error, the system instead transferred 620,000 Bitcoin to those recipients, briefly placing the value of the mistaken payout at roughly 62 trillion Korean won, or around $42 billion. The exchange reversed the transactions within minutes, but a portion of the funds had already been moved by recipients before the reversal could take effect.
Bithumb stated that it recovered 99.7% of the erroneously sent Bitcoin on the same day as the incident. The remaining 0.3%, amounting to approximately 1,788 Bitcoin that had already been sold by recipients, was covered using the company’s own reserves. In the weeks that followed, the exchange contacted affected users individually and managed to recover most of those sold funds as well.
Despite these efforts, a small number of recipients have refused to return the outstanding balance. An industry official familiar with the matter told Chosun Biz that some of those users argued they bore no responsibility for returning the assets, pointing to the exchange’s own error as justification for keeping the funds. Bithumb did not provide an immediate response to a request for comment.
Legal experts suggest those users may face an unfavorable outcome if the dispute proceeds to court. Under South Korean law, assets received in error are generally classified as unjust enrichment, which carries a legal obligation to return them regardless of how the mistake occurred. The provisional attachment filing signals that Bithumb is prepared to pursue the matter through formal litigation if voluntary repayment is not forthcoming.
The February incident has also prompted a broader regulatory response. Earlier this week, South Korea’s Financial Services Commission ordered all domestic cryptocurrency exchanges to reconcile their internal ledgers with actual asset holdings every five minutes. The directive is intended to reduce delays in detecting discrepancies and prevent similar errors from going unnoticed. An inspection conducted in the wake of the Bithumb incident revealed that three of the country’s five major exchanges had been reconciling their balances only once per day, significantly limiting their capacity to identify and respond to errors in a timely manner.
The combination of Bithumb’s legal action and the new regulatory requirements reflects growing scrutiny of operational controls within South Korea’s cryptocurrency industry. The outcome of the court proceedings could set a precedent for how similar cases involving mistaken digital asset transfers are handled under domestic law going forward.
Originally reported by CoinTelegraph.
