Costly Bitcoin Glitch Escalates as Bithumb Targets Holdout Users in Court: Report

After recovering most assets, Bithumb is now pursuing court action against a small group of users who continue to resist repayment.

South Korean cryptocurrency exchange Bithumb has moved to secure court approval to freeze 7 BTC that remain unreturned following a payout error earlier this year.

The dispute escalated after a small number of users declined to hand back the funds.

Legal Route

According to the latest report by a local media, ‘Chosun Biz,’ Bithumb has initiated a provisional seizure, which is a legal step that allows assets to be temporarily locked before a formal civil lawsuit is filed. The move comes after a February incident in which the South Korean crypto exchange mistakenly distributed Bitcoin instead of Korean Won (KRW) during a promotional event.

At the time, Bithumb had intended to send a total of 620,000 won to 249 participants, with individual payouts ranging between 2,000 and 50,000 won. However, due to an input error, the system processed the payments in BTC, which caused an accidental transfer of nearly 620,000 BTC, a figure that translated into tens of trillions of won.

Although the exchange reversed the transactions within minutes, it was unable to fully retrieve the distributed assets, as some recipients had already sold the BTC or used it to purchase other digital assets. While the company has since contacted affected users individually and recovered most of the mistakenly issued funds, a small group has refused to return the remaining portion, which prompted the current legal escalation.

Industry sources cited by local media said some users argued that the error originated from the exchange and therefore should not obligate them to return the assets. Legal experts, however, believe the case is one of unjust enrichment and noted that recipients are required to return assets received in error.

Cashing Out Could Backfire

Authorities have also indicated that individuals who converted the Bitcoin into cash could face greater complications if legal proceedings move forward. At the time of the incident, Bitcoin prices on Bithumb briefly fell to the low 80 million won range, whereas current prices are significantly higher, around 105 million won.

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This creates a potential burden for users who sold the assets earlier at lower prices, as they may now need to repurchase Bitcoin at a higher market rate to comply with any court-ordered return.