South Korean Court Rules in Favor of Bithumb in Lawsuits Over Mistaken Bitcoin Credits
Bithumb Wins Court Cases Over $40 Billion Bitcoin Error
A South Korean court has ruled in favor of cryptocurrency exchange Bithumb in two lawsuits. The cases involved users who sold Bitcoin that was mistakenly credited to their accounts during a $40 billion error in February 2026.
The Seoul Central District Court issued rulings on Wednesday and Thursday, ordering two users to return the proceeds from selling the mistakenly credited Bitcoin. Bithumb is seeking to recover funds from users who sold the Bitcoin before the exchange could freeze the affected accounts.
Key Details of the Court Rulings
- The court ruled for Bithumb in two of four lawsuits filed against users.
- One ruling involved a claim for 194 million won ($140,000), and the other for 5 million won ($3,600).
- Two additional lawsuits, seeking about 14.8 million won ($10,700) and 500 million won ($362,000), are still pending.
- The court used service by public notice because it could not deliver documents to the defendants through normal methods.
How the Mistake Happened
In February 2026, Bithumb intended to distribute 620,000 won (about $420 at the time) in rewards to 249 users during a promotional event. An employee accidentally selected Bitcoin instead of Korean won as the payment unit, crediting customer accounts with 620,000 Bitcoin.
At the time, the mistakenly credited Bitcoin was worth over $40 billion. Bithumb later recovered 618,212 Bitcoin, or 99.7% of the amount. However, some users had already sold 1,788 Bitcoin before the exchange froze the accounts.
Regulatory Scrutiny and Other Legal Issues
South Korea’s Financial Supervisory Service (FSS) investigated Bithumb over the error. The regulator focused on how the exchange could credit users with Bitcoin it did not hold. The FSS sent Bithumb an inspection opinion in early August, starting formal sanctions proceedings, but no final penalty has been announced.
Bithumb is also facing other legal challenges. In June, South Korean police raided its offices as part of an investigation into alleged hiring favoritism involving a lawmaker. Additionally, the exchange is challenging a six-month partial business suspension over Anti-Money Laundering violations. A Seoul court temporarily blocked the suspension in April.
What Is Confirmed
- Bithumb won two first-instance court rulings to recover proceeds from users who sold mistakenly credited Bitcoin.
- The exchange recovered 99.7% of the 620,000 Bitcoin mistakenly credited during a promotional event.
- South Korea’s FSS has begun sanctions proceedings against Bithumb over the error.
What Is Still Unclear
- The outcome of the two remaining lawsuits is pending.
- No final penalty has been announced by the FSS regarding the Bitcoin error.
- The results of Bithumb’s challenge to its business suspension are still unknown.
Why This Matters for Crypto Users
The case highlights the risks of errors on cryptocurrency exchanges. Users who receive mistaken credits may not be entitled to keep the funds, even if they sell them. The rulings also show that exchanges can take legal action to recover mistakenly distributed assets.
