South Korean court rules Bithumb can recover funds from mistaken Bitcoin giveaway
Bithumb wins lawsuit over mistaken Bitcoin credits
A South Korean court has ruled in favor of Bithumb, a cryptocurrency exchange, in a lawsuit against a user who sold Bitcoin (BTC) mistakenly credited to their account. The court ordered the user to return the proceeds from the sale of the Bitcoin, which was part of a larger error in February.
The mistake involved 620,000 BTC (worth about $43 billion at the time) accidentally credited to hundreds of users during a promotional campaign. The error occurred when a staff member entered the reward amount in Bitcoin instead of Korean won (KRW).
What led to the lawsuit
- In February, Bithumb accidentally credited 620,000 BTC to users during a promotional giveaway.
- The error caused the BTC-KRW trading pair on the platform to drop about 15%.
- Bithumb filed four civil lawsuits in March to recover funds from users who sold the mistakenly credited Bitcoin.
- This ruling is the second win for Bithumb in these lawsuits.
Court orders return of $140,513 in proceeds
The Seoul Central District Court ruled that the defendant must return the proceeds from selling the mistakenly credited Bitcoin. The case involved about 194 million Korean won, or roughly $140,513. The largest of the four lawsuits is worth 500 million won ($362,229).
The court’s decision supports Bithumb’s claim that the funds were credited in error and should be returned. This is the second lawsuit Bithumb has won out of the four it filed.
Why the mistake happened
The error occurred when a Bithumb staff member entered the reward amount as Bitcoin (BTC) instead of Korean won (KRW) during a promotional campaign. This led to hundreds of users receiving large amounts of Bitcoin by mistake.
The incident briefly caused the price of Bitcoin on Bithumb’s platform to drop about 15%, affecting other users. South Korean authorities also launched an investigation into Bithumb, citing poor internal controls and risk management.
What is confirmed
- The court ruled in favor of Bithumb, ordering the return of proceeds from the mistakenly credited Bitcoin.
- The lawsuit involved about $140,513, with the largest case worth $362,229.
- Bithumb filed four lawsuits in total to recover funds from users who sold the mistakenly credited Bitcoin.
- The error was caused by a staff member entering the reward amount in Bitcoin instead of Korean won.
What is still unclear
- The outcome of the remaining two lawsuits is not yet known.
- It is unclear how many users were affected by the error or how much Bitcoin was sold before Bithumb could correct the mistake.
Why this matters for crypto users
The ruling sets a precedent for how exchanges can recover funds mistakenly credited to users. It also highlights the risks of errors in cryptocurrency transactions, where mistakes can have large financial consequences.
For Bithumb, the decision is a step toward recovering funds lost in the February error. The exchange is also planning an initial public offering (IPO) in 2028, which could be influenced by how it handles such incidents.
