Bithumb faces potential class action lawsuit over mistaken bitcoin payout
Bithumb Lounge in Seoul’s Gangnam District, Monday / Yonhap
Some investors affected by Bithumb’s erroneous distribution of 620,000 bitcoins are considering bringing a class action lawsuit against the cryptocurrency exchange, legal sources said Thursday.
The affected users include those whose holdings were forcibly liquidated or sold at sharply lower prices during the sudden plunge triggered by the mistaken transfer. Although Bithumb promptly offered a 110 percent compensation package, which covers 100 percent of losses plus an additional 10 percent, some users are reportedly inquiring about claims for emotional distress damages.
Law firm Ahnpark & Partners recently outlined legal issues surrounding the incident in a blog post, stating, “We have been receiving inquiries about the feasibility of seeking damages and pursuing a class action lawsuit.”
An official at a Seoul-based law firm, who asked not to be named, said, “The number of inquiries is not yet large enough to move forward with an actual class action, but we have received some consultation requests and are monitoring how the situation unfolds while reviewing possible response strategies.”
On Feb. 6, the country’s second-largest cryptocurrency exchange had planned to credit event participants with bitcoin worth 2,000 won ($1.4) each. Instead, an employee mistakenly transferred 2,000 bitcoins per user. With bitcoin trading at about 98 million won at the time, the error resulted in a total misallocation of about 62 trillion won, or 244 billion won per recipient.
At around 7:30 p.m. that day, the exchange was hit with a surge of sell orders, sending bitcoin prices on its platform down to approximately 81.11 million won, a discount of up to 17 percent compared with other exchanges, where it was trading near 98 million won. The sharp divergence led to about 10 minutes of panic selling, during which some traders suffered losses.
To address the fallout, Bithumb said it would pay 20,000 won to users who were logged into its platform at the time of the incident. It also pledged to reimburse customers who sold at unusually low prices between 7:30 p.m. and 7:45 p.m. for the full price difference, along with an additional 10 percent.
Legal disputes may still arise if some users reject the proposed compensation. Some affected investors claim that the temporary price gap, which widened by as much as 17 percent compared with other exchanges, caused not only financial losses but emotional distress, according to legal sources.
Opinion remains divided over whether emotional distress claims would be legally viable. Some argue that investors could seek separate damages for mental suffering, while others contend that because the exchange has already pledged to compensate losses beyond the principal amount, the practical benefit of pursuing a class action may be limited.
Disagreements may also surface over how damages should be calculated, including whether prices should be based on Bithumb or those on other exchanges. Legal experts further note that any consequential losses resulting from low-price sales would require separate proof.
“Given that Bithumb has voluntarily announced a compensation plan, the dispute may not escalate significantly,” said a financial lawyer based in Seoul’s Gangnam District.
“However, a key issue will be whether the exchange could have reasonably foreseen that recipients of the mistakenly credited coins might sell them simultaneously, triggering a sharp price drop on its platform. If such a scenario was foreseeable and adequate preventive measures were not taken, liability for damages could be recognized.”