SK Crypto Exchange Bithumb Blames System Flaws for $40-B Error

South Korea’s Bithumb said on Wednesday that serious flaws had left the crypto exchange’s internal system susceptible to potential sabotage and failed to prevent an erroneous transfer of more than $40 billion in assets last week, Jack Kim reported for Reuters.

Bithubmb's giveaway amounted to 15 times the exchange’s holding of 42,000 bitcoins. (Image: Bithubmb) 

The country’s second-largest virtual asset exchange said it accidentally gave away about 620,000 bitcoin to customers during a promotional event, instead of 620,000 won ($426), triggering a 17% slump in bitcoin’s price.

Bithumb CEO Lee Jae-won said the giveaway amounted to 15 times the exchange’s holding of 42,000 bitcoins, largely because a lag of about 24 hours in processing transactions delayed updates to the balance of virtual assets.

“We are acutely aware of the deficiency in internal system control,” Lee told a parliament committee hearing on the incident that took place on Friday.