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South Korean opposition party lawmakers have criticized the country’s top finance sector regulators, the Financial Services Commission (FSC) and Financial Supervisory Service (FSS), over their failure to discover an issue that led to the fiasco at digital asset exchange Bithumb earlier this month, in which $44 billion in Bitcoin was accidentally credited to users’ accounts.
According to data provided by Rep. Kang Min-guk to The Korean Times, the FSC—the country’s top financial policymaking and regulatory authority—reviewed Bithumb three times, once in 2022 and twice in 2025, while the FSS—the regulator that carries out day-to-day supervision and examinations of financial institutions under the FSC’s oversight—conducted three inspections during the same period.
Kang, of the opposition People Power Party, reportedly told the local outlet that existing safeguards were insufficient to prevent a scenario in which a single employee could trigger large-scale coin transfers and that discrepancies between actual holdings and accounting records would go undetected.
“The episode is not merely a technical mishap but a case that lays bare deeper structural weaknesses in the virtual asset market, including complacent supervision and gaps in regulation,” Kang said.
This sentiment was echoed by Rep. Han Chang-min of the Social Democratic Party—a minor opposition party—who reportedly questioned whether regulators had conducted largely procedural inspections.
“Authorities appeared to be shifting responsibility onto Bithumb despite their supervisory role,” Han said, as reported by The Korean Times.
Bithumb fiasco
South Korean digital asset exchange Bithumb reportedly gave away around $44 billion worth of BTC to customers accidentally during its promotional rewards campaign, triggering a sharp selloff on the exchange.
Bithumb had planned to distribute small cash rewards of KRW 2,000 ($1.40) or more to each user as part of a promotional event, but winners received at least 2,000 BTC each instead.
“We would like to make it clear that this incident is unrelated to external hacking or security breaches, and there are no problems with system security or customer asset management,” Bithumb said after the event.
The exchange subsequently claimed it had recovered 99.7% of excess BTC that were “mistakenly credited to users” and that no customer assets were compromised. However, the discrepancy still triggered price swings and compensation payments.
The issue prompted a response from the FSC, chaired by Lee Ok-won, which held an emergency inspection to conduct a comprehensive review of the internal controls of all local digital currency exchanges, in coordination with the FSS and the Korea Financial Intelligence Unit (KoFIU).
The incident also prompted FSS Governor Lee Chan-jin to announce that the agency will ramp up investigations in 2026 into high-risk practices such as “whale” trading, coordinated price manipulation, and schemes that exploit exchange outages or deposit/withdrawal suspensions, known in South Korea as “gating.”
The FSS said at the time that the erroneous Bithumb payout “exposed the vulnerabilities and risks of virtual assets.”
Meanwhile, a formal probe launched by the FSS into the incident was due to be concluded by February 13 but has since been extended to the end of the month, according to The Korean Times, with the regulator reportedly citing the need for additional time.
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