Bithumb pursues court intervention to retrieve 7 BTC following distribution mishap
Major South Korean cryptocurrency platform Bithumb seeks judicial asset seizure to recover 7 Bitcoin that remain outstanding after a distribution mistake in February.
Major South Korean cryptocurrency platform Bithumb has initiated legal action in an effort to retrieve 7 Bitcoin that remain unaccounted for following a distribution mishap that resulted in 620,000 BTC being erroneously sent out during a February promotional campaign.
According to a Thursday report published by Chosun Biz, a local news outlet, the platform has submitted an application for a provisional attachment—a judicial mechanism that enables the freezing of assets before civil litigation commences—aimed at users who have not yet returned the mistakenly received cryptocurrency.
The incident occurred on Feb. 6, when the platform intended to distribute a combined total of 620,000 won ($420) among 249 participants who won an event. However, as a result of an input mistake, the platform's system instead disbursed 620,000 Bitcoin (BTC), momentarily valuing the erroneous transfer at approximately 62 trillion Korean won ($42 billion). While the platform managed to reverse the transactions in a matter of minutes, some of the funds had already been transferred elsewhere.
Following the incident, Bithumb reported that it successfully recovered 99.7% of the mistakenly sent funds on that same day. The platform stated that the outstanding 0.3%, equivalent to 1,788 BTC, which had already been sold by recipients, was compensated for using the company's own reserves.
Bithumb turns to court-backed recovery
In the time since the error occurred, Bithumb has reached out to impacted users on an individual basis and has successfully recovered the majority of the sold cryptocurrency, but a minority of recipients have declined to return what remains, Chosun Biz reported. According to an industry official with knowledge of the situation who spoke to the publication, certain recipients have maintained that they bear no responsibility for returning the digital assets, pointing to the platform's error as justification.
Nonetheless, the report suggested that such users could encounter disadvantageous results in court should the matter move forward to litigation. According to South Korean legal statutes, assets obtained by mistake are generally categorized as unjust enrichment and are required to be returned to their rightful owner.
Cointelegraph contacted Bithumb seeking comment regarding the legal proceedings but had not received a response at the time of publication.
South Korea forces exchanges to reconcile every five minutes
At the beginning of this week, South Korea's Financial Services Commission issued a directive requiring all cryptocurrency trading platforms to perform reconciliations between their internal accounting records and their actual asset holdings every five minutes in order to prevent delays in identifying discrepancies following the Bithumb distribution incident.
The regulatory inspection revealed that three out of the nation's five largest cryptocurrency exchanges were conducting balance reconciliations just once per day, which significantly restricted their capacity to identify and address errors promptly.