A Costly Typo and a One-Minute Collapse: How a Bithumb Giveaway Shook Bitcoin Trading in Korea

A single operational mistake appears to have triggered one of the sharpest intraday Bitcoin dislocations seen on a major exchange this year. Bitcoin briefly plunged by roughly 10% on South Korea’s Bithumb exchange after users reportedly received large amounts of BTC by accident and rushed to sell them, overwhelming the order book in seconds.

The incident unfolded when traders noticed that the BTC/KRW pair on Bithumb suddenly dropped by double digits within a minute before rapidly rebounding. Screenshots and on-chain chatter circulating on X suggested that a user had offloaded as much as 2,000 BTC in one go, an amount that, even in today’s subdued market conditions, would be worth around $134 million.

An account known as “Definalist,” which describes itself as a group of China-based crypto traders, first highlighted the abrupt price move and linked it to a rumor that the Bitcoin had been distributed unintentionally. According to subsequent claims from the same source, the sell-off stemmed from a promotional “random box prize” campaign in which Bithumb employees allegedly intended to send out small cash rewards of 2,000 Korean won, roughly $1.40. Instead, BTC was reportedly selected as the unit of transfer rather than KRW.

If accurate, the implications are staggering. Definalist alleged that hundreds of users may have received 2,000 BTC each before the error was detected. Even a fraction of that scale would represent billions of dollars in unintended distributions, instantly explaining the violent but short-lived market reaction.

Bithumb has since acknowledged that something went wrong, though it stopped short of confirming the exact amount of Bitcoin or the number of affected accounts. In a statement, the exchange admitted that “abnormal” sums of BTC were sent to certain users and that the Bitcoin price “temporarily fluctuated sharply as some accounts that received the BTC sold it.” The company said it moved quickly to restrict the relevant accounts and emphasized that prices returned to normal levels within five minutes.

Crucially, Bithumb stressed that the episode was not the result of a hack. “We want to make it clear that this incident is unrelated to any external hacking or security breach, and does not pose any issues with system security or customer asset management,” the exchange said, adding that its domino liquidation prevention system functioned as designed and prevented cascading liquidations.

The timing could hardly be worse for Bithumb. Bitcoin remains well below its October peak of $126,000, having fallen nearly 47% from that high before showing tentative signs of recovery. Liquidity is thinner, volatility is elevated, and markets are less forgiving of operational errors. Against that backdrop, even a brief flood of unexpected supply can produce outsized price swings.

The flash crash also compounds regulatory pressure on the exchange. Just last week, South Korea’s financial competition watchdog reportedly raided Bithumb’s offices over promotional practices tied to last year’s marketing campaigns. While unrelated, the latest mishap reinforces concerns about internal controls at one of the country’s most prominent crypto venues.

Protos has contacted Bithumb for further clarification and has indicated it will update its reporting if additional details emerge.