South Korean cryptocurrency giant Bithumb has secured a major legal victory, winning first-instance court rulings in two lawsuits aimed at recovering funds from a colossal system error. The Seoul Central District Court ruled in favor of the exchange this week, ordering users who wrongfully sold mistakenly credited Bitcoin to return the proceeds. These rulings mark a significant step in Bithumb’s ongoing effort to clean up the aftermath of a blundering administrative mistake that temporarily distributed over $40 billion worth of Bitcoin to a handful of users.
Because the defendants could not be reached through standard legal delivery methods, the court processed both cases through public notice. Thursday’s court victory covered a claim for 194 million won, or roughly $140,000, while Wednesday’s ruling addressed a smaller 5 million won dispute. Bithumb is still awaiting decisions on two other pending lawsuits that seek approximately 14.8 million won and 500 million won from users who pocketed the accidental windfalls.
How the $40 Billion Bitcoin Mistake Happened
The sheer scale of this cryptocurrency blunder traces back to a routine promotional event held on February 6, 2026. Bithumb originally intended to reward 249 specific users with a modest 620,000 Korean won each, which was equivalent to about $420 at the time. Instead, a devastating clerical error occurred when an employee selected Bitcoin as the payout currency rather than the local fiat. In an instant, those accounts were credited with 620,000 BTC.
Bithumb scrambled to fix the error and successfully recovered 99.7% of the mistakenly issued digital assets almost immediately. However, a few quick-acting users managed to sell off approximately 1,788 BTC before the exchange could freeze their accounts. In March, Bithumb responded by filing four unjust enrichment lawsuits against the individuals who refused to return the cash proceeds from those sales. Bithumb’s legal strategy explicitly focused on recovering the cash generated from the trades rather than demanding the actual Bitcoin back.
Regulatory Scrutiny and What Comes Next for Bithumb
Despite these courtroom wins, Bithumb is not entirely out of the woods. South Korea’s Financial Supervisory Service quickly launched an investigation into the February incident to understand how such a massive failure occurred. Regulators are particularly focused on the technical mechanics of the glitch, specifically questioning how the trading platform could credit users with an astronomical amount of Bitcoin that it did not actually hold in its reserves. In early August, the regulator formally initiated sanctions proceedings against the exchange, though no official financial penalties or operational restrictions have been announced just yet.
This technical fiasco adds to a growing list of legal and regulatory headaches for Bithumb this year. Back in June, South Korean police raided the company’s offices as part of a completely separate investigation regarding alleged hiring favoritism involving a local lawmaker. Furthermore, the exchange is actively challenging a six-month partial business suspension related to historical Anti-Money Laundering compliance violations. While a Seoul court temporarily stayed that suspension in April, the final outcome remains uncertain, leaving Bithumb to navigate a complex maze of legal battles and regulatory hurdles in the months ahead.
