Financial Authorities Form Emergency Task Force over 'Bithumb Erroneous Payment Incident'... 'On-Site Inspections if Necessary'

Emergency inspection meeting convened to discuss follow-up measures
Inspections to be expanded to cover virtual asset holdings and overall internal controls
Immediate shift to on-site inspections if any legal violations are found

Financial authorities have formed an emergency response task force and launched an inspection in connection with the erroneous Bitcoin payment incident at virtual asset exchange Bithumb.

Yonhap News Agency

The Financial Services Commission (FSC) announced that on the afternoon of the 7th it held an emergency inspection meeting chaired by Vice Chairman Kwon Dae-young with the Korea Financial Intelligence Unit (KoFIU) and the Financial Supervisory Service (FSS) to identify the circumstances of Bithumb's erroneous Bitcoin payments and discuss response measures.

The financial authorities have decided to strengthen their response, viewing this incident as a case that exposed the vulnerabilities and risks of virtual assets. Vice Chairman Kwon asked the FSS to closely ascertain the status of user damages caused by the system failure and to continuously monitor Bithumb so that it promptly implements compensation measures for affected users.

The emergency response task force, comprising the FSC, KoFIU, FSS, and the Digital Asset eXchange Alliance (DAXA), will first conduct an inspection of Bithumb and then expand inspections to other virtual asset exchanges, covering their virtual asset holdings and operations, as well as their overall internal control systems. If necessary, it also plans to review system improvement measures that would allow close monitoring of exchanges' virtual asset holdings. If any violations of laws are identified during the inspection process, even partially, the authorities plan to immediately shift to on-site inspections by the FSS.

The financial authorities will also push ahead with fundamental institutional reforms in parallel. They plan to require virtual asset service providers to undergo periodic inspections by external institutions on the status of their virtual asset holdings, and to introduce a system under which virtual asset service providers bear strict liability, even without fault, when user damages occur due to system failures and similar incidents.

On the previous day at 7 p.m., Bithumb mistakenly paid 2,000 BTC (approximately 197 billion won) instead of 2,000 won per person to 695 participating users during the process of distributing event rewards to attract customers. According to Bithumb, as of 4 a.m. on the 7th, 99.7% of the 620,000 BTC erroneously paid out had been retrieved before being traded, and about 93% of the 1,786 BTC that had already been sold had been recovered.