Bithumb to reimburse users after accidental 620,000-bitcoin transfer

Seoul, Feb 8 (IANS) Bithumb, one of South Korea’s crypto exchanges, said on Sunday it will reimburse customers who suffered losses from panic selling triggered by an internal transfer error last week.

The cryptocurrency exchange mistakenly transferred 620,000 bitcoins to 249 users participating in a promotional event around 7 p.m. Friday, reports Yonhap news agency.

That amounted to an average of 2,490 bitcoins worth 244 billion won ($166 million) per user. Some recipients sold the bitcoin, causing a brief but sharp drop in prices.

The company said it will fully compensate affected customers for their losses and provide an additional 10 percent compensation.

The exchange also said it will waive trading fees on all listed assets for one week starting at midnight Monday.

Bithumb said it has activated a companywide crisis management system led by senior executives and formed a task force to address investor losses.

Bithumb earlier said it had recovered 618,212 bitcoins and later recouped 93 percent of the 1,788 bitcoins sold by users.

The crypto exchange halted the transactions and withdrawals of the users’ accounts at 7:40 p.m. Consequently, Bithumb still failed to recover 125 bitcoins.

The accident took place as a Bithumb employee mistakenly typed the payment unit as “BTC” instead of the “Korean won” for a reward to the users of the promotional event.

The fallout caused a brief drop in the bitcoin price on Bithumb as users sold the bitcoin received.

The company estimated the amount of customer losses due to the erroneous payment to be around 1 billion won.

It confirmed cases where transactions occurred under unfavorable conditions, and announced its plan to compensate affected customers who panic-sold by covering the full price difference plus an additional 10 percent bonus.

CEO Lee Jae-won offered an apology and vowed to “take full responsibility” for the incident. The Financial Supervisory Service (FSS) will look into the crypto exchange’s measures to protect its users and the possibility of a full recovery of mistakenly sent bitcoins.

—IANS

na/