Bithumb won the first ruling in four civil lawsuits seeking to recover proceeds from Bitcoin mistakenly credited to customers during a February promotional event.
Summary
- Bithumb won a first-instance order requiring repayment of approximately 194 million won in mistaken proceeds.
- The August 27 judgment was the first ruling among four separately filed civil recovery lawsuits.
- Bithumb accidentally credited 620,000 BTC internally while intending to distribute 620,000 won total in rewards.
- Claims against four defendants total 714 million won, based on amounts reported by Digital Asset.
- South Korean regulators ordered five-minute ledger reconciliations and stronger controls following the February operational failure.
Judge Kim Yu-seong of the Seoul Central District Court’s 90th Civil Division ruled for Bithumb on Aug. 27 and ordered the defendant to return approximately 194 million won as unjust enrichment.
The decision is a first-instance judgment and may be appealed. No appeal or deadline for the remaining three rulings had been publicly reported when the judgment was announced.
Bithumb’s first case involved 194 million won
Bithumb filed separate civil claims against four users in March. The exchange alleged that the users sold Bitcoin credited to them by mistake and retained the resulting cash after being asked to return it.
The Aug. 27 case involved the second-largest claim, according to the original Korean report. The remaining claims were approximately 500 million won, 14.8 million won and five million won.
Contrary to one translated account, no verified Aug. 26 judgment involving the five-million-won claim was found. The original report describes the Aug. 27 decision as the first ruling among all four lawsuits.
The combined reported claims total approximately 713.8 million won. Court schedules for the other three cases have not been publicly disclosed.
Bitcoin payout error occurred on Bithumb’s ledger
Bithumb intended to distribute 620,000 won in total rewards during a random-box event on Feb. 6. An employee selected Bitcoin as the payment unit, causing the exchange’s internal system to credit 620,000 BTC instead.
The full amount was not transferred across the Bitcoin blockchain. The credits existed primarily within Bithumb’s internal ledger and exceeded the exchange’s actual Bitcoin holdings.
Bithumb’s official notice said the company identified the mistake after 20 minutes and began blocking trading and withdrawals 15 minutes later. Restrictions covering 695 customers were completed within 35 minutes.
Some recipients sold mistakenly credited Bitcoin before the controls took effect. The selling briefly pushed Bithumb’s BTC/KRW price about 17% lower than the wider market.
Bithumb recovered most disputed assets before suing
Bithumb initially said it recovered more than 99% of the mistaken credits through account reversals and voluntary returns. It later reported to South Korea’s National Assembly that 99% of the 1,788 BTC sold or left unrecovered during the initial response had been recovered by March 10.
As crypto.news reported, Bithumb later pursued legal action over approximately seven Bitcoin that remained missing. The exchange also sought provisional asset seizures before filing its civil claims.
The court’s ruling supports Bithumb’s argument that customers cannot retain proceeds generated from an obvious payment error. However, each remaining case must still be decided on its own evidence and defenses.
The judgment concerns civil restitution, not criminal liability. South Korean courts have previously distinguished between criminal treatment of virtual assets and civil claims based on their measurable economic value.
Regulatory action continues beyond the lawsuits
South Korea’s Financial Services Commission found broader weaknesses in exchange ledger reconciliation, approval systems and operational-risk controls following the incident.
In April, the regulator ordered exchanges to introduce automated balance reconciliation at five-minute intervals. It also required separate accounts, automatic validity checks, third-party verification and multiple approvals for high-risk manual payments.
The Financial Supervisory Service reportedly sent Bithumb an inspection opinion in early August, starting a process that allows the exchange to respond before a proposed sanction reaches the regulator’s review committee. A final penalty has not been announced.
Bithumb obtained a court stay against a six-month suspension in May. That proceeding is unrelated to the February Bitcoin error.
The next developments will be any appeal from the Aug. 27 judgment, rulings in the three remaining recovery cases and the outcome of the regulatory review.
