Bithumb admits internal flaws behind $40 billion bitcoin miscredit, 17% drop

South Korea exchange Bithumb admitted on Wednesday that severe internal system flaws left the platform exposed to potential sabotage and led to a mistaken $40 billion bitcoin transfer to customers, after it accidentally credited 620,000 bitcoins instead of 620,000 won (roughly $428), and bitcoin fell 17% on Bithumb, according to Reuters. CEO Lee Jaewon told a parliamentary committee that the miscredit equaled 15 times the platform\u0027s 42,000 bitcoins, largely due to a 24-hour lag in processing transactions and delayed updates to its crypto holdings balance, and acknowledged deficiencies in internal system control, policy failures to match transfer volumes to actual holdings, and the absence of a separate account to ensure transfer safety, according to Reuters. The exchange has recovered most of the bitcoin, but 1,786 that were sold within minutes before it froze customer accounts remain missing, and the customers who sold those coins are legally bound to return them, according to Reuters. Separately, the Financial Supervisory Service said Sunday it will investigate \u0022high-risk\u0022 practices that undermine market order, including large-scale price manipulation by so-called whales, trading schemes tied to suspended deposits and withdrawals, and coordinated pump tactics fueled by social media misinformation, and will build tools that automatically extract suspicious trading patterns at the second and minute levels alongside AI text-analysis systems to flag potential market abuse.