Bitcoin suffered a flash crash to $55,000 on South Korean exchange Bithumb this week after what appears to have been a major internal accounting error.
Bithumb mistakenly credited users with 2,000 BTC each instead of a small reward worth 2,000 Korean won (about $1.50), according to a blog post published Friday.
The result was the appearance of tens of millions of dollars of phantom bitcoins in hundreds of user accounts. No bitcoins were moved on-chain and the inflated balances only existed on Bithumb’s internal ledger.
Users who suddenly saw huge balances wasted no time trying to sell, triggering a sharp sell-off on Bithumb’s BTC/KRW pair, sending prices 15.8% below other exchanges. At one point, BTC was trading at 81 million won ($55,000), while prices elsewhere remained relatively stable.
Bithumb said it identified the abnormal transactions through internal controls and restricted transactions on affected accounts shortly after the incident.
The exchange said prices on its platform normalized in about five minutes and that its liquidation prevention system worked as expected, preventing any cascading forced liquidation linked to price movement.
The company added that the incident was not linked to an external hack or security breach and that customer assets remained secure.
