Bitcoin is sinking in rough seas. The crypto market is under constant selling pressure. However, some storms come from within the industry itself. Operational errors, sometimes monumental, further undermine the asset. The latest one is astonishing. It shakes South Korea and its Bithumb exchange. Its scale questions the foundations of the entire crypto system.
In brief
- Historical error: Bithumb distributes 620,000 BTC by mistake during a promotion, or $44 billion.
- Quick response: The exchange blocks accounts in 35 minutes and recovers 99.7% of funds.
- Market impact: A flash crash causes bitcoin to fall by 17% on the Bithumb platform alone.
- Fragile context: The incident comes after widespread outages of major exchanges in October 2025.
Bitcoin: the distribution error that almost caused everything to collapse
Friday February 6, Bithumb turns a banal promotion into a disaster. The South Korean exchange wanted to offer $1.50 to some users. A simple digital comma error changes the game. Result: 695 customers receive 2,000 bitcoin each. That’s a staggering total of 620,000 BTC. The value exceeds the 44 billion dollars at that time.
Influential trader Scott Melker immediately warns about X. He writes:
Bithumb accidentally distributes ~2,000 $btc instead of $1.50 rewards, triggering immediate sell-offs and a flash crash to ~$55,000 on the exchange.
Panic immediately sets in among the beneficiaries. Some sell this unexpected loot without delay. This rush creates an instant market imbalance. Bithumb quickly activates its emergency protocols. In just thirty-five minutes, the accounts concerned are blocked. The exchange then announced that it had recovered 99.7% of the miscredited assets.
This rapid reaction limits direct damage. But the incident exposes a gaping flaw in internal processes. The confidence of crypto investors takes a serious hit. This event reveals a worrying systemic vulnerability.
Crypto market: when exchanges become the weak link
The flash crash that follows is spectacular and revealing. On the Bithumb platform alone, bitcoin plunges 17%. Its price briefly touched $55,000. This localized crash is reminiscent of a much larger episode. In October 2025, the market experiences its worst crash in years.
Massive liquidations then test all infrastructures. Binance, Coinbase, Kraken… each giant falters under the pressure. The CryptosR_Us account summarizes this general debacle.
The tweet explodes. He describes the debacle of centralized exchanges during the worst liquidations. Binance, Coinbase, Robinhood, Kraken: all faltered. Their infrastructure failed at the worst possible time. Traders found themselves stranded, helpless in the face of the free fall of the markets. This brutal observation sums up the vulnerability of an entire system.
Today, Bithumb's error proves that one bug is enough. It can unleash a storm on an entire market. South Korean regulators react with great firmness. They immediately mention the “vulnerabilities and risks of virtual assets”.
An on-site inspection of Bithumb is under serious consideration. The credibility of the entire crypto sector is at stake.
The crypto industry faces its biggest crisis of confidence
Bithumb is desperately trying to contain the reputational damage. Its official press release heavily emphasizes a crucial point. The management declared :
We would like to clarify that this incident is not related to any external hacking or security breach, and that there are no systems security or customer asset management issues.
Source: Bithumb press release
Yet these assurances ring particularly hollow today. To err is human, but the control systems have seriously failed. This incident occurs in an already very tense context. Exchanges are painfully trying to regain lost trust.
Coinbase recently admitted to its abusive account freezes. The company claims to have reduced these blockages by 82%. Binance, for its part, launched a $400 million compensation fund. Its stated objective is clear: “rebuild confidence” after the October outages.
The shocking figures from the Bithumb incident
- Total value distributed in error: $44 billion;
- Number of user accounts affected: 695;
- Reaction time to block accounts: 35 minutes;
- Asset recovery rate: 99.7%;
- Current bitcoin price: $68,894.
The outlook for bitcoin is darkening structurally. CryptoQuant analysts are observing very worrying technical signals. The leading digital asset is sinking deep into a sustained downtrend. This convergence of technical and fundamental bad news paints a particularly difficult horizon.
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