South Korean cryptocurrency exchange Bithumb is working to recover Bitcoin mistakenly distributed to customers, with legal action under consideration if recipients refuse to return the funds.
"We are contacting customers who immediately sold the Bitcoin one-on-one to persuade them to return it and coordinate the method," a Bithumb official told Yonhap News on Sunday.
On February 6 at 7 p.m., Bithumb attempted to distribute 620,000 won to 249 winners of a "random box" promotional event. Staff entered the unit as "Bitcoin" instead of "won," resulting in 620,000 Bitcoin being sent to customer accounts.
Bithumb blocked trading and withdrawals from affected accounts approximately 35 minutes after the error. By then, some recipients had already sold 1,788 Bitcoin. Financial authorities identified 86 users who sold the mistakenly distributed coins.
The exchange has recovered most of the sold Bitcoin in won or other cryptocurrencies. As of 4:30 a.m. on February 7, approximately 125 Bitcoin worth about 13 billion won ($9.2 million) remained unrecovered.
The outstanding amount includes approximately 3 billion won in cash that dozens of customers withdrew to personal bank accounts. The remaining 10 billion won was used to purchase altcoins and other cryptocurrencies.
Industry observers say Bithumb has strong prospects for recovery through legal action, as the incident constitutes an erroneous transfer. The random box event specified prizes ranging from 2,000 won to 50,000 won per person, suggesting recipients could have recognized the Bitcoin as unjust enrichment.
If Bithumb prevails in an unjust enrichment lawsuit, customers would be required to return profits from selling the Bitcoin and could bear litigation costs.
Legal experts remain divided on whether customers who intentionally sold the Bitcoin face criminal liability. In December 2021, South Korea's Supreme Court acquitted a defendant who transferred 1.4 billion won worth of mistakenly sent Bitcoin to another account.
"Virtual assets are not treated the same as legal tender under the law," the Supreme Court ruled. "This does not mean they should receive the same protection as legal tender under criminal law."
Some legal professionals suggest precedent could shift as the cryptocurrency market expands and regulations develop.
"The court did not consider virtual assets as 'property' under criminal law at that time," one legal expert said. "Given changes in social perception and the level of legal and institutional development since then, there appears to be room for a different judgment."
Bithumb announced compensation measures for affected customers. Users logged into the app or website during the incident will receive 20,000 won. Customers who sold at low prices between 7:30 p.m. and 7:45 p.m. on February 6 will receive the full price difference plus 10% additional compensation. The exchange will also waive all trading fees for seven days starting February 9.
