Bithumb CEO Lee Jaewon Says "There Were Two Previous Cases of Erroneous Payments That Were Recovered"

Lee Jaewon, CEO of Bithumb, stated on the 11th that there had been "about two previous cases of erroneous payments that were recovered."

Lee Jaewon, CEO of Bithumb, is responding on the 11th at the plenary session of the National Assembly's Committee on Political Affairs to an emergency inquiry regarding the large-scale Bitcoin overpayment incident that occurred at the domestic virtual asset exchange Bithumb. Yonhap News Agency

At the urgent interpellation on Bithumb held by the National Assembly's Political Affairs Committee that day, CEO Lee responded to Social Democratic Party lawmaker Han Changmin's question, "Have there been previous accidents?" by saying, "When we communicated with the audit office, there were two cases."

When asked, "Was it the same person in charge then and now?", Lee explained, "We had set up a multi-approval payment system from the beginning," and added, "This was a human error that occurred while we were using two systems in parallel during the process of upgrading the exchange's operating system."

Lee Chanjin, Governor of the Financial Supervisory Service, said of the differences in control mechanisms among cryptocurrency exchanges, "We have checked the IT systems, and we are in the process of examining how internal controls are structured at each company."

Representative Han pointed out, "Looking at what the authorities have done since this incident broke out, it raises suspicions that they only conducted formal inspections and issued recommendations," adding, "Even though the financial authorities bear responsibility, they could be criticized for trying to shift the blame onto Bithumb alone."

Regarding a full-scale investigation into erroneous payment incidents at cryptocurrency exchanges, Governor Lee said, "We will conduct inspections," but added, "There is no reporting obligation under the current law."

Han Changmin, Social Democratic Party lawmaker. Yonhap News Agency

Earlier, on the afternoon of the 8th, Bithumb attempted to pay prize money ranging from 2,000 won to 50,000 won per person to winners of an event, but mistakenly entered the unit as "Bitcoin" instead of "won," resulting in the erroneous payment of 620,000 Bitcoin. It has been assessed as an unprecedented incident in which more than 60 trillion won worth of virtual assets, based on book value, were erroneously paid out in the system.

Bithumb blocked trading and withdrawals 35 minutes after the incident occurred and recovered 99.7% of the erroneously paid Bitcoin. Of the 1,788 Bitcoin that were sold, it secured an additional approximately 93%, but about 125 Bitcoin are believed to remain unrecovered. Roughly 13 billion won worth remains unrecovered, and customer losses from low-price sales and price distortion are estimated to be around 1 billion won.