South Korea launches investigation into Bithumb after $40b bitcoin transfer

South Korean authorities have launched an investigation into the cryptocurrency exchange Bithumb after it mistakenly sent $40 billion worth of bitcoins to its customers.

Bithumb said that it was supposed to pay 2,000 won to each customer as part of the promotional campaign; however, due to a human error 620,000 bitcoins were transferred instead.

Some customers immediately sold their bitcoins resulting in the sale of 1,788 bitcoins.

Now, the Financial Supervisory Service (FSS) has formed a task force to investigate the matter. It mandated the task force to conduct on-site inspections and in case of legal violations, a formal investigation would be initiated.

The FSS Governor Lee Chan-Jin said, “It was nothing more than erroneously entered virtual data, yet it ended up being traded.”

The South Korean government has called for immediate action, saying the issue cannot be taken lightly.

Bithumb has said that it was able to recover 93% of the value of sold bitcoins and covered the remaining shortfall using its own assets.

The company announced new measures to tighten controls over transfers, adding, “We will supplement previously missing processes to ensure that approvals will now require at least two stages to prevent similar incidents.”