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- Lawmakers fault regulators after Bithumb’s massive Bitcoin miscredit exposes oversight gaps.
- FSC missed flaws despite repeated checks, heightening scrutiny of Korea’s crypto supervision.
- Past asset losses and new errors intensify calls for stronger controls across digital markets.
South Korean lawmakers are putting more pressure on the financial regulators due to the miscrediting of Bitcoin by the Bithumb exchange. The miscrediting resulted in a rapid sell-off. The incident has sparked concerns about the oversight of the expanding digital asset market in the country.
According to a report, lawmakers said the Financial Services Commission (FSC) did not notice the major flaws in the internal system of the Bithumb exchange. The FSC has carried out at least three inspections at the Bithumb exchange since 2022. The regulator did not notice the flaw in the system that led to the miscrediting incident.
Rep. Kang Min-guk, a member of the People Power Party, stated that the issue is not just a system failure. There are structural flaws in the crypto market. The lawmaker cited the failure in the regulation and oversight of the market.
Bithumb’s Massive Bitcoin Miscredit Triggers Regulatory Probe
Bithumb miscredited the users with the wrong amount during a promotional event on the 6th of February. The exchange miscredited the users with 2,000 Bitcoin instead of the correct amount, which is 2,000 Korean won. This resulted in the loss of 620,000 BTC, which the exchange did not have.
FSC officials announced on the 10th of February that they would initiate a probe and take stern legal action against any activities that disrupt the order in the market. The inspection is due by February 13, but it is extended until the end of the month.
Legislators also criticized the delay. They claimed that it has further raised concerns about the FSC’s capability to monitor cryptocurrency exchanges. The lawmakers said that it is important for the FSC to react faster to system failures on large exchanges.
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The National Assembly’s emergency meeting on Feb. 11 invites Bithumb CEO Lee Jae-won to testify before lawmakers. He acknowledged that Bithumb is responsible for two previous payout failures. He claimed that these were minor and were recovered.
Unrecovered BTC Intensifies Scrutiny of Bithumb
The company has said that it has recovered most of the cryptocurrency that was wrongly credited to users. The company also added that 125 BTC is still unrecovered. The amount of unrecovered cryptocurrency is estimated to be in millions of dollars. The large payout error has caught the attention of lawmakers.
The latest incident has raised concerns about how South Korea handles cryptocurrency exchanges. Several losses of seized cryptocurrency have led to criticism of the government. In 2021, 22 BTC were lost from a cold wallet held by the Gangnam Police Station. A nationwide audit discovered the loss.
The Gwangju District Prosecutors’ Office lost 320 BTC in August 2025 due to a password leak. The government asserted that the hacker had recently returned the cryptocurrency.
Lawmakers and industry observers say the string of incidents reflects ongoing weaknesses in oversight. They warn that South Korea must strengthen its monitoring of digital-asset custody and exchange systems to prevent further failures.
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