South Korea’s second-largest crypto exchange just won its first court battles in the strange saga of the 620,000 Bitcoin that should never have existed. The Seoul Central District Court ruled in Bithumb’s favor on Wednesday and Thursday in two of four lawsuits the exchange filed against users who sold Bitcoin the platform accidentally credited to their accounts in February, according to a Chosun Biz report. The rulings are the latest chapter in one of the wildest operational errors in crypto exchange history — a mistake that briefly put more than 40 billion USD of imaginary Bitcoin into customer accounts.
By Diego Rivera | August 28, 2026
The Hook: Courts Side With the Exchange
Here is what just happened, in plain terms. Thursday’s ruling covered Bithumb’s claim for 194 million won — about 140,000 USD — against a user who cashed out mistakenly credited Bitcoin. Wednesday’s ruling covered a much smaller claim of 5 million won, roughly 3,600 USD. In both cases, the court agreed that Bithumb has a right to take back the proceeds of Bitcoin its customers were never supposed to receive.
Two more lawsuits are still pending, seeking about 14.8 million won (roughly 10,700 USD) and 500 million won (about 362,000 USD). Interestingly, both decided cases moved forward through what is called “service by public notice” — a legal procedure used when court documents cannot be delivered to defendants through normal channels. In other words, some of the people being sued never showed up to fight.
How a Rewards Event Created 40 Billion USD of Phantom Bitcoin
To understand why Bithumb is suing its own users, you need to rewind to February 6, 2026. The exchange was running a promotional event and planned to distribute 620,000 won — about 420 USD at the time — in rewards to 249 users. An employee selecting the payout made a catastrophic dropdown-menu mistake: they picked Bitcoin instead of Korean won as the payment unit. The result? Customer accounts were credited with 620,000 Bitcoin, a stash worth more than 40 billion USD at the time — far more Bitcoin than the exchange actually held.
Think of it like a bank teller meaning to hand you 620,000 pennies and instead crediting your account with 620,000 gold bars. The money was never real. But some customers moved fast enough to make it real for themselves.
- 620,000 BTC — the amount mistakenly credited, worth over 40 billion USD at the time
- 618,212 BTC recovered — 99.7 percent of the mistaken credit, clawed back after Bithumb froze affected accounts
- 1,788 BTC — the slice some users managed to sell before the freeze
- 4 lawsuits filed in March — targeting users who sold and kept the proceeds
Bithumb says it is seeking cash from those sales rather than the Bitcoin itself — a practical choice, since the exchange only ever wanted its won-denominated rewards event to cost what it was supposed to cost.
The Core Conflict: An Exchange Under Siege
The court rulings are only one front in Bithumb’s broader war on multiple fronts. South Korea’s Financial Supervisory Service investigated how the exchange could credit customers with Bitcoin it did not hold, and according to the report, it sent Bithumb an inspection opinion in early August that formally begins sanctions proceedings. No final penalty has been announced yet. Cointelegraph approached the Financial Services Commission, which oversees the FSS, for an update but received no response by publication time.
There is more. South Korean police raided Bithumb’s offices in June as part of an unrelated probe into alleged hiring favoritism involving lawmaker Kim Byung-ki. The exchange is also challenging a six-month partial business suspension imposed over anti-money-laundering violations — a penalty a Seoul court paused in April while the challenge plays out. For a company reportedly targeting a 2028 IPO, every one of these headlines matters.
Market Implications: Why This Matters Beyond Korea
If you hold crypto on an exchange, this story is really about you. It is a reminder that the operational plumbing behind even major platforms can fail in absurd ways — and that the legal system, at least in South Korea, will generally side with the exchange when money is credited by mistake. The court’s logic is simple: if your bank accidentally deposits a fortune into your account, spending it does not make it yours. The same principle is now being applied to Bitcoin.
For altcoin traders more broadly, Bithumb remains one of the most important liquidity venues in the Korean market, where local premiums on tokens have historically moved global prices. Regulatory sanctions, a suspended business order, and ongoing lawsuits create uncertainty around one of Korea’s crypto pillars. Uncertainty at major exchanges tends to mean thinner trading, warier institutional partners, and more caution from the regulators who watch what happens next.
The Verdict
The scoreboard so far: Bithumb has recovered nearly all of the phantom Bitcoin, won the first two court cases over the remainder, and is mopping up the last few hundred thousand dollars in litigation. But the reputational and regulatory bill is still being calculated. The FSS sanctions process is just beginning, and the outcomes of the two remaining lawsuits will complete the picture of how expensive one dropdown-menu error can become.
For regular investors, the lesson is straightforward: treat found money on an exchange with extreme suspicion. The odds that you get to keep it are poor — and increasingly, courts are willing to say so in writing.
The cryptocurrency market remains highly volatile. This article is for informational purposes only and does not constitute financial advice.
620,000 BTC credited because someone picked the wrong dropdown item. one misclick and you owe customers a fortune that doesnt exist. insane
right? and the wildest part is some users actually cashed out before anyone noticed. 40 billion in imaginary bitcoin moving through real order books lol
imagine waking up to 620,000 BTC in your account and thinking yeah this is fine, let me cash out. wild that the exchange even had a bug that could do that
194 million won is barely 140k usd. the legal fees on chasing thousands of users one by one will eat bithumb alive before they recover anything close to the real number
they wont chase thousands of users, theyll chase the biggest cashouts and let the small fish go. the 500 million won case is the line in the sand
chasing thousands of users for 140k each is pure intimidation strategy. the 500M won whale case is the only one with real money on the line
calling it intimidation is a stretch, they won both cases. the real question is whether they bother with claims under 10k usd at all
they won both because keeping glitched money has no legal footing anywhere. enforcement cost is the real filter, small claims will settle themselves out of pure fatigue
the guy saw 620k btc sitting in his account and went for the cashout instead of asking a single question. free money instinct beats survival instinct lol
courts siding with the exchange was the obvious call. nobody genuinely believed you keep money from a glitch. the pending 500 million won case is the only interesting one
Agreed, though I feel for whoever thought a 420 dollar reward landed in their account. Finding out Bithumb is suing you over it is a rough way to start the day.
exactly, both wins were tiny claims. if the 500 million won case somehow goes the other way, every small claim suddenly looks contestable
the wildest part is bithumb somehow coming out of this looking sympathetic. an exchange that credited 40 billion dollars of fake bitcoin is the victim now, sure
620,000 BTC from a wrong dropdown and it somehow cleared. whoever built that credit flow should be writing incident reports for the rest of their career
620k BTC from a dropdown error and only two rulings in so far. whatever came of the internal controls audit after the february incident
What happens when users who already cashed out the fake BTC get taken to court? Bithumb is suing people who rightfully kept glitched money. Wild precedent if that holds up.
@Heather N. exactly. Imagine waking up thinking you won the lottery and then getting sued by the casino for cashing in their mistake. The legal fees alone would make chasing tiny amounts ridiculous.
620k BTC credited because someone picked the wrong dropdown. One UI error could theoretically bankrupt an exchange. Risk management failed spectacularly here.
one ui error theoretically bankrupting an exchange is why anything above rounding-error size needs a human in the settlement loop
a credit flow that can mint 620k BTC from a dropdown should have a hard cap at settlement, period. human in the loop is the minimum bar
worst part is the dropdown shipped at all. two rulings down, but the 500 million won case is the one that decides whether small claims even matter
two wins, both tiny amounts. the 500 million won case decides if this was a legal strategy or just theater
the wildest part is the glitch credited 620k BTC, close to 3 percent of all btc that will ever exist, to random korean users lol
3 percent of all btc that will ever exist, credited from one wrong dropdown. whoever was supposed to test that settlement flow clearly never ran a single edge case
two of four decided, both tiny claims. the 500 million won case is the precedent that decides whether bithumb recovers real money or just headlines