The exchange accidentally credited hundreds of users with 2,000 bitcoins (about $133 million each at the time) instead of the reward of 2,000 South Korean won ($1.50 each). The ensuing panic sale of “phantom” assets triggered an immediate drop in the bitcoin price on the exchange itself by more than 20% to $55,000.
Finding millions in their accounts, many users immediately tried to sell bitcoins. This triggered an avalanche of sales. However, there was no real movement of bitcoins on the blockchain. All transactions were conducted exclusively in the exchange’s internal registry (balances were “paper”), which allowed for a quick fix.
As a result, the price of the main cryptocurrency on the platform quickly normalized. Bithumb promptly released a statement, emphasizing that the incident was not related to a hack or security leak, and customer assets were not affected. A system to prevent cascading liquidations was activated, avoiding more serious consequences for the market.
Analysts’ conclusions
Despite the rapid “normalization” with the situation on Bithumb, stock analysts continue to heatedly discuss the incident and draw conclusions from what happened. Basically, they boil down to the following:
– In the pursuit of profit, exchange players often forget about risks;
– the largest losses may be caused not by hackers, but by a simple human error or software failure in centralized systems;
– Exchange reliability is determined not only by trading volume, but also by the maturity of internal procedures, code quality control and speed of response to emergencies;
– a market where one wrong click can crash the price by 20% remains extremely immature and sensitive. Such events are a trap for inexperienced traders.
Experts note that such incidents, even quickly corrected, undermine the confidence of institutional investors that the crypto market is trying to attract.
For the average investor, this is an extra reason to think about the principles of responsible asset storage: the use of hardware wallets for long-term savings and diversification of funds across several reliable trading platforms.
