South Korea’s FSS Demands Bithumb Users Return ’Ghost Bitcoin’ - A Regulatory Reckoning
South Korean regulators just dropped a crypto bombshell—and it's haunting one of the nation's largest exchanges.
The Financial Supervisory Service is cracking down on what it calls 'ghost Bitcoin.' The watchdog is urging—or rather, demanding—that Bithumb users return digital assets credited to their accounts due to a now-infamous system glitch. Think of it as a phantom crypto windfall that never should have materialized.
Behind the Regulatory Push
This isn't a polite request. The FSS is applying serious pressure, framing the unrecovered assets as a critical compliance failure. The glitch, which temporarily showed inflated balances or unauthorized transactions, created a wave of 'ghost' coins. Users who spotted the error and withdrew the funds now face a stark choice: return the crypto or brace for legal consequences. It's a classic case of 'not your keys, not your crypto' meeting 'not your glitch, not your profit.'
Exchange Under the Microscope
Bithumb finds itself in the hot seat. While the exchange likely patched the technical flaw, the aftermath is a regulatory nightmare. The incident exposes the fragile seams between exchange infrastructure, user accountability, and financial oversight. For a sector that champions immutability, a reversible transaction caused by a bug is an ironic twist even the most cynical trader couldn't script.
The move signals a hardening stance from Korean authorities. They're not just watching the market anymore; they're auditing its very ledgers. For users, it's a brutal lesson in finality—sometimes, the blockchain giveth, and the financial supervisor taketh away. Just another day where the only thing more volatile than crypto prices is regulatory goodwill.
South Korea’s watchdog seeks to address ledger system issues
🚨A simple typo, a $44B disaster.
A Bithumb employee intended to send 695 users a promotional reward of 2,000 KRW (~$1.40) but mistakenly entered the unit as Bitcoin.
Instead of a small coffee's worth of cash, users received 2,000 $BTC each, creating "ghost coins" worth 15x… pic.twitter.com/L6c7GLmtrW
— Conor Kenny (@conorfkenny) February 9, 2026
The FSS head stated that the case falls under the scope of unjust enrichment requiring restitution. He explained that the exchange explicitly stated it would issue Bitcoin equivalent to 2,000 Korean won, but accidentally distributed 620,000 Bitcoin(~$44 billion) to hundreds of users during the firm’s recent promotional event.
Lee revealed that the agency is discussing regulatory frameworks to address issues with ledger systems. He added that the FSS is also incorporating unresolved problems into licensing risks.
“If any legal violations are detected, even partially, we will take strict measures in accordance with relevant laws. We are assessing whether current laws, including the User Protection Act, have been violated. Our stance differs from the view that no sanctions are possible.”
–Lee Chan-jin, Governor of the Financial Supervisory Service (FSS).
Lee also stated that the agency’s inspection findings WOULD inform the second phase of the User Protection Act. He argued that there is a need to strengthen the regulatory and supervisory framework of digital assets as they get incorporated into the legacy financial system.
The FSS is planning to inspect internal controls at other crypto exchanges. Lee said the initiative aims to create an environment where users can trade with confidence.
He also spoke about spot-based crypto ETFs, noting that the interconnection between virtual assets and legacy finance triggers cascading effects when one side falters. He said the public cannot transact if legacy finance is not stabilized.
FSS focuses its inspection capacity on high-risk incidents
Lee also revealed that the third disciplinary review committee will convene this week. The meeting will be about the incomplete sales of Hong Kong stock-linked securities (ELS) by banks. The FSS head said the agency plans to proceed with caution and thoroughness due to the significant consumer impact.
The FSS is also investigating allegations of sanctions against MBK partners, especially those related to electronic short-term bonds (ABSTB). Lee confirmed that the FSS’s disciplinary committee is currently reviewing the findings and proposed measures of the investigation. He also stated that the process is taking time due to legal issues and statements from MBK and involved executives.
Lee revealed that the FSS is working to ensure its sanctions do not disrupt licensing for integrated investment accounts (IMA) and issuers. He also stated that the FSS’s mandate is to verify information and the appropriateness of loans for Coupang-related inspections. Coupay was under scrutiny late last year due to customer financial data leaks, and Coupang Financial in January due to the appropriateness of seller loans.
Lee also confirmed that discussions with the Financial Services Commission about the FSS’s special judicial police were over. He revealed that both agencies agreed to grant investigative authority to the FSS’s capital market special judicial police. The agency will introduce new measures for illegal private financing.
The FSS and the FSC also agreed not to grant such authority in areas like accounting audits or financial company inspections. Both agencies implemented strict controls to prevent excessive investigative power. The FSS’s capital market special judicial police will include prior deliberation by the Securities and Futures Commission’s investigation committee before stating any investigations.
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