Bitcoin This week, South Korean exchange Bithumb plummeted to $55,000 due to a major internal accounting error.
According to a blog post on Friday, Bithumb mistakenly issued 2,000 BTC to each user instead of a small reward worth 2,000 Korean won (about $1.50).
The result was tens of millions of dollars worth of virtual Bitcoin showing up in hundreds of user accounts. No Bitcoin is transferred to the chain, and the inflated balance only exists on Bithumb’s internal ledger.
Users who suddenly see huge balances will immediately try to sell, triggering a massive sell-off in Bithumb’s BTC/KRW currency pair, causing the price to be 15.8% lower than other exchanges. Bitcoin was trading at 81 million won ($55,000) at one point, while prices elsewhere have remained relatively stable.
Bithumb said that shortly after the incident, it discovered the unusual transactions through internal controls and restricted transactions from the affected accounts.
The exchange said prices on its platform returned to normal within about five minutes and that its liquidation prevention system was working as expected, preventing any cascading forced liquidations associated with the price movement.
The company added that the incident was not related to external hackers or security breaches and that customer assets remain safe.