Bithumb Wins Two Court Rulings Over $40B Bitcoin Fat-Finger Error
August 27, 2026
A $40 Billion Mistake Gets Its Day in Court
South Korean exchange Bithumb has won two lawsuits against users who cashed out Bitcoin the platform never meant to give them. The Seoul Central District Court ruled in the exchange’s favor this week, Cointelegraph reported, ordering defendants to hand back the proceeds from coins sold during one of the largest fat-finger errors in crypto history. The rulings close the first chapter of a saga that began in February, when a single wrong menu selection credited 620,000 BTC, worth more than $40 billion at the time, to a group of ordinary user accounts.How One Wrong Dropdown Created a 620,000 BTC Blunder
The error traces back to February 6, during a routine promotional event. An employee preparing payouts selected Bitcoin rather than Korean won as the reward currency. Instead of small cash rewards worth roughly $420, a combined 620,000 BTC was distributed across 249 user accounts. Some recipients moved fast. Sell orders began hitting the order book before Bithumb noticed the mistake, and the exchange’s BTC-KRW trading pair plunged about 15% as the unexpected supply flooded in, according to The Block. The incident drew immediate government scrutiny over the exchange’s internal controls.The Recovery: 99.7% Clawed Back Within Days
Bithumb froze the affected accounts and reversed the erroneous credits, recovering 618,212 BTC, or 99.7% of the total. That still left a gap: roughly 1,788 BTC had already been sold by users before the freeze took hold. Rather than chasing the coins themselves, Bithumb went after the money. In March, the exchange filed four civil lawsuits for unjust enrichment, a legal claim used to recover benefits someone received by mistake, targeting the cash proceeds those users pocketed.
Why an Exchange Can Reverse Coins Credited in Error
The episode is a useful lesson in how a best crypto exchange candidate, or any centralized platform, actually works under the hood. When an exchange credits Bitcoin to your account, nothing moves on the blockchain. The balance you see is an entry in the company’s internal database, an IOU backed by coins the exchange holds in its own wallets. That is why Bithumb could claw back 99.7% of a $40 billion error in days: it simply corrected its own ledger. The only losses that escaped were conversions into something the exchange could not reverse on its own, which is exactly what the users who sold did. Once the BTC became won and left the platform, recovering it required a courtroom rather than a keyboard.Seoul Court Hands Bithumb Two Wins in a Week
The Seoul Central District Court sided with Bithumb in rulings delivered on Wednesday and Thursday. One of the decided cases sought about 194 million won, roughly $140,000, while the other claimed around 5 million won, or $3,600. Both cases proceeded by public notice because court papers could not be delivered to the defendants through normal channels, a detail suggesting the users chose not to engage with the process. Two suits remain pending, including the largest at 500 million won (about $362,000), alongside a 14.8 million won claim (roughly $10,700).Regulators Still Circling as IPO Plans Take Shape
The courtroom wins do not end Bithumb’s troubles. South Korea’s Financial Supervisory Service investigated the incident and opened formal sanctions proceedings in early August, citing inadequate internal controls. No final penalty has been announced. The stakes go beyond fines. Bithumb is targeting an initial public offering in 2028, and a regulatory record showing a $40 billion operational failure is not the prospectus line any exchange wants. How decisively the company resolves both the lawsuits and the sanctions process could shape how underwriters and regulators view that listing. For everyday users who buy crypto on centralized venues, the FSS response will also signal how seriously Korean regulators treat operational risk.Could the Rulings Set a Precedent for Exchange Errors?
Legal observers will be watching the two remaining cases closely. If the court continues to side with Bithumb, the rulings could establish a clear principle in South Korea: crypto credited by mistake is not a windfall, and spending it creates a debt. That question is not hypothetical for the wider industry. Promotional campaigns, airdrops and crypto rewards programs process millions of automated payouts, and fat-finger incidents have recurred across exchanges for years. Clear case law on who owes what after an error may reduce the legal ambiguity surrounding these events.A Test Case for Trust in Centralized Platforms
The deeper story is about the trade-off at the heart of centralized crypto. The same architecture that let Bithumb erase a $40 billion mistake in days is the one that gives an exchange final say over every balance on its books. February showed the risk of that arrangement running in one direction; the clawback showed it running in the other. The courts are now filling in the last piece: what happens when value escapes the ledger entirely. Two rulings in, the answer in Seoul appears to be that the exchange gets its money back, but only after months of litigation. For an industry built on the promise of irreversible transactions, this is a reminder that most of crypto’s daily activity still runs on reversible databases and the legal system that stands behind them.
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Madiha Riaz
Madiha is a seasoned researcher in cryptocurrency, blockchain, and emerging Web3 technologies. With a background in organic chemistry and a sharp analytical mindset, she brings scientific depth to decentralized innovation. Since discovering crypto in 2017 and investing in 2018, she’s been uncovering and sharing deep insights into how blockchain is redefining the digital asset landscape.
