South Korea launches probe into Bithumb over $43 billion fat-finger incident

South Korea's Financial Supervisory Service (FSS) has escalated a routine inspection into a full-scale investigation of the local crypto exchange Bithumb following a massive 'fat-finger' error. The incident occurred on February 6 when a staff member mistakenly distributed 620,000 BTC (valued at $43.1 billion) instead of KRW during a promotional giveaway, an amount far exceeding Bithumb's actual reserves of about 46,000 BTC at the time. Bithumb claims to have recovered 99.7% of the misdirected Bitcoin and promised to compensate affected users with 110% of their losses, while also setting up a 100 billion won user protection fund. The incident has drawn severe criticism, exposing systemic vulnerabilities in the exchange's internal risk management and potentially impacting the social standing of crypto in South Korea amid legislative efforts. Political figures noted the incident suggested exchanges might be selling assets they do not own, leading the ruling party to propose imposing a 15% to 20% cap on individual stakes in crypto exchanges and discussing imposing legal responsibilities comparable to traditional financial institutions.

(Source：The Block)