Bithumb, South Korea's second-largest cryptocurrency exchange, has initiated legal proceedings to recover Bitcoin erroneously distributed during a promotional event. The error occurred on February 6 when a data entry mistake led to 620,000 BTC being credited to user accounts instead of the intended 620,000 won ($465).

The glitch briefly inflated balances by over $40 billion, causing a 15% price drop in BTC-KRW trading pairs as some recipients liquidated portions of the windfall. Bithumb has filed for asset freezes against users who failed to voluntarily return the funds, marking one of the most costly operational errors in crypto exchange history.

Regulators, including the FSA, are scrutinizing the incident amid concerns about exchange risk controls. The event highlights the precarious nature of digital asset accounting systems, where single-point failures can trigger cascading market impacts.