South Korean crypto exchange Bithumb has said that system flaws were the reason behind the platform’s accidental 620,000 Bitcoin giveaway.
Bithumb Gave Away 620,000 BTC Instead Of 620,000 Won
Bithumb, the second largest digital asset exchange in South Korea, had an incident on Friday where it accidentally gave away 620,000 Bitcoin instead of 620,000 Won to customers during a promotional event.
The BTC was worth more than $40 billion, while the original amount meant to be given away was equivalent to just $426. Bithumb quickly realized the error and halted trading and withdrawals for the 695 affected customers within 35 minutes of the giveaway.
The platform was able to recover the vast majority of the BTC that it had accidentally sent out, but some users had managed to sell their tokens within minutes of the glitch.
As reported by Reuters, Bithumb revealed on Wednesday that the source of the accident lied in serious flaws present in the exchange’s internal system. These flaws had left the platform vulnerable to potential sabotage and failed to prevent the erroneous 620,000 BTC transaction.
According to Bithumb CEO Lee Jae-won, the exchange actually only held 40,000 BTC at the time of the accident, meaning that the giveaway sent out Bitcoin equal to 15 times the platform’s reserve. The transaction went through mostly due to a 24 hour lag involved in processing transactions that delayed updates to the exchange’s balance.
The giveaway being so large resulted in a 17% plunge in Bitcoin’s price on Bithumb. As mentioned earlier, the exchange managed to recover most of the tokens, but 1,786 BTC became involved in selling before the platform could take action. South Korean regulators have said the users who sold these coins are legally required to return them.
Bithumb said that it would provide 20,000 Won ($13.6) as compensation to all customers who were using the platform at the time. It also pledged to waive trading fees, among other measures.
In some other news, profit-taking has been fast declining on the Bitcoin network recently, as on-chain analytics firm Glassnode has pointed out in an X post.
As displayed in the above graph, the 90-day moving average (MA) of the Bitcoin Realized Profit/Loss Ratio, an indicator that tracks the ratio between the profits and losses being realized by investors on the blockchain, has witnessed a plunge recently.
The metric’s value is now 1.32, which suggests that profit-taking is still the dominant mode of distribution, but profits are only slightly edging losses. If the current market trajectory continues, it’s possible that the indicator will retest the 1.00 level next.
“Historically, a sustained break below 1 has overlapped with broad-based capitulation, where realized losses outpace profit-taking across the market,” explained Glassnode.
BTC Price
Bitcoin has retraced some of its recent recovery as its price has dropped to the $66,500 level.
