South Korea accidentally launched a full investigation into Bithumb and the broader industry after the exchange sent More than $40 billion worth of Bitcoin was offered to customers last Friday.
According to CryptoQuant, the exchange, the second largest in South Korea, held about 46,000 BTC just before the incident. Based on regulations filesMost of these were customer funds, while the exchange held less than 200 BTC as of Q3 2025.
However, on Friday, the exchange accidentally sent 620,000 BTC as customer rewards – almost 13-14x more than the reported holdings.
A quick response from regulators to rein in the exchanges
Needless to say, Bithumb’s ‘ghost Bitcoin’ flaw has raised more questions than answers.
For supervisorsthis was more than a mistake. That’s why this incident turned an escalation of the Bithumb investigation into an industry-wide audit.
According to the financial sector watchdog Financial Supervisory Service (FSS), on-site inspections have started and formal investigations will follow if legal violations are found.
At a press conference on Monday, FSS Governor Lee Chan-jin said:
“It was nothing more than an accidental entry of virtual data, but eventually it was traded. That’s the crux of the problem. The transaction was actually executed.”
Initially, the exchange was going to send 2.00 won or $1.37 as a reward, totaling $423. Instead, it ended up sending more than $40 billion worth of Bitcoin. Some users cashed out the BTC rewards, but more than 90% of the funds were recovered, according to Bithumb.
The exchange apologized for the mistake and promised changes to improve internal control systems.
“We have reported this to all relevant authorities and are fully cooperating with the ongoing Financial Supervisory Service inspection. We will have systems and processes in place to prevent human error from becoming an accident.”
Meanwhile, regulators said the study’s findings will be used to further strengthen regulations in the sector. The FSS Governor added,
“If we cannot properly solve the ghost coin problem, how can (the virtual asset market) be included in the system? The inspection results are reflected in the tasks that need to be greatly supplemented in the second phase of the legislation.”
Investor reactions to ‘ghost Bitcoin’ bug
Following the incident, more than 4,100 BTC were delisted from the exchange on Friday – a record high since early 2025. During the same period, Bithumb’s total reserves fell sharply from 46.7K BTC to 41.7K BTC – a drop of 10%.
However, in recent days, outflows have fallen below 500 BTC per day. This seemed illustrative of the measured investor behavior, despite the ongoing research.
Source: CryptoQuant
Final thoughts
- South Korea has launched an investigation into Bithumb’s ‘ghost Bitcoin’ and plans to expand the audit to the broader crypto industry.
- According to officials, the findings will contribute to the second phase of legislation for the sector.