What to know:
- Bithumb mistakenly distributed 620,000 Bitcoins instead of small cash rewards, leading to the loss of about $700K.
- The exchange has launched legal action because some users refuse to return funds.
A major error at a Bithumb has triggered a legal fight over millions in misplaced funds. Bithumb has decided to take legal action after the company failed to recover a portion of Bitcoin its that was mistakenly distributed to users.
The issue started on the 6th of February, when Bithumb planned to send cash rewards to 249 event winners. Instead of distributing the money in Korean won, the exchange mistakenly issued Bitcoin, sending out a total of 620,000 Bitcoins.
Source: Chosunbiz
Although the exchange quickly reversed the transaction within minutes, not all of the funds were recovered. Some users immediately sold the Bitcoin and the others converted it into other digital assets, making it difficult for the company to retrieve everything.
Also Read: Bithumb Bitcoin Payment Error Sparks Sudden Market Shock, 99.7% Funds Recovered
As a result of those users decision, Bithumb has now moved to recover the remaining funds through legal means. A few hours ago, he company filed for a provisional seizure, a court-approved action that allows the assets to be temporarily frozen before a full lawsuit is pursued. The latest effort targets around seven Bitcoins, which is valued at roughly 700 million won at the time of when the incident happened.
Despite recovering a large portion of the mistakenly distributed assets, some users have refused to return the funds. According to industry sources, a number of recipients argued that the mistake was the company’s fault and therefore not their responsibility to correct.
Bithumb Mounts Legal Pressure on Users Who Withheld the Funds
Legal experts say the situation is likely to favor the exchange if it proceeds to court. The case is being viewed as one of unjust enrichment, meaning individuals who received funds by mistake are legally required to return them.
Authorities have warned that users who sold the Bitcoin may face even greater financial risk. Since cryptocurrency prices fluctuate, those who converted the assets earlier at lower prices could be forced to buy them back at higher market rates to repay the equivalent value.
At the time of the incident, Bitcoin prices on Bithumb briefly dropped into the lower 80 million won range due to the sudden supply shock. However, prices have since recovered to around 105 million won, increasing the potential losses for those who must return the funds now.
Also Read: Bitcoin Hits $72K, Ethereum Reaches $2.2K as Markets React
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