A Seoul court has ordered a Bithumb user to return the cash proceeds obtained from selling Bitcoin that had been mistakenly credited to the account during the exchange’s February 2026 payout accident, marking a favorable ruling in the largest of four separate civil actions Bithumb is currently pursuing.
The verdict, handed down on August 27, 2026, sharpens the legal path forward for the exchange and raises the probability of success in the three remaining suits tied to an incident that briefly saddled user accounts with tens of billions of dollars in phantom balances.
The Ruling in Detail
Judge Kim Yu-seong of the 90th Civil Division at the Seoul Central District Court presided over the case, siding with Bithumb, the plaintiff, in its restitution suit against a user who had liquidated the mistakenly credited bitcoin and retained the proceeds in cash.
According to Digital Asset, which first reported the ruling, the sum at stake in this specific case is approximately 194 million won (about $145,000), making it the second largest among the four defendants Bithumb sued in March 2026.
The remaining claims are widely distributed by size. The largest is roughly 500 million won (about $373,000), while the two smallest are 14.8 million won (about $11,000) and 5 million won (about $3,700). Bithumb had already prevailed in the smallest of these disputes on August 26, meaning Thursday’s judgment is its second consecutive win within a single business day.
Anatomy of a Fat-Finger Error That Briefly Topped $40 Billion
The lawsuits trace back to the evening of February 6, 2026, when Bithumb was running a promotional random-box campaign designed to distribute small won-denominated rewards ranging between 2,000 won and 50,000 won per winner.
During processing, a staff member mistakenly entered the payout unit as Bitcoin rather than won, according to statements released by South Korea’s Financial Services Commission at the time. The result was a distribution of approximately 620,000 BTC across roughly 695 user accounts, briefly valued at more than $40 billion at prevailing prices.
The scale of the phantom balances exceeded Bithumb’s actual Bitcoin reserves. Reporting at the time noted that the exchange’s real holdings were estimated at around 40,000 BTC, meaning the ledger system treated non-existent assets as legitimate and permitted their distribution and onward trading.
Roughly 1,786 BTC entered the exchange’s order books before trading was halted for the affected accounts, and Bithumb’s local BTC/KRW pair briefly slid by about 17% to the low 80 million won range, well below prices quoted on competing platforms.
The exchange restricted trading and withdrawals on the affected accounts within about 40 minutes and reversed most of the internal ledger entries the same day. Bithumb has stated it recovered 99.7% of the misallocated bitcoin through those immediate reversals, absorbing the residual shortfall using its own reserves and compensating affected traders at 110% of their losses.
Regulatory Fallout and Legislative Response
The incident triggered a swift response from South Korean authorities. Financial Supervisory Service Governor Lee Chan-jin, a former lawyer, publicly characterised the affected balances as unjust enrichment subject to restitution, and warned holdouts that a failure to return the funds could expose them to further legal consequences. The Financial Services Commission, the Financial Intelligence Unit, and the Financial Supervisory Service jointly convened an emergency inspection meeting on February 7 to assess the incident and outline next steps.
The National Assembly’s Political Affairs Committee took the unusual step of opening an emergency inquiry to probe accountability, and a bill aimed at preventing similar incidents at digital asset exchanges was subsequently introduced.
Regulators separately ordered domestic crypto exchanges to reconcile internal records with actual asset holdings every five minutes by the end of May 2026, and imposed strengthened internal control and continuous ledger inspection obligations on all licensed venues. The Bank of Korea has also floated the idea of a crypto circuit breaker, citing the Bithumb episode as a live example of how a single input mistake can distort local price discovery.
Recovery Track and the Parallel Provisional Seizure
Bithumb reported to the National Assembly that as of March 10, it had recovered 99% of the 1,786 Bitcoin that had been sold before its account freeze took effect. In April, the exchange filed for a provisional seizure targeting the remaining seven BTC that were still unreturned, valued at approximately 700 million won at the time of the original error.
Provisional seizure is a court-sanctioned mechanism that freezes assets ahead of a formal civil action, blocking a debtor from disposing of contested property while litigation proceeds. The four civil suits filed in March, of which two have now been decided, form a separate legal track directed specifically at users who had already liquidated the mistakenly credited bitcoin and retained the sales proceeds in cash.
Korean legal experts have consistently characterised such cases as unjust enrichment, meaning recipients are required to return the assets, and where the coins have already been sold, users may need to repurchase them at higher prevailing prices to make good. That exposure has widened as Bitcoin traded well above the 100 million won mark in the months following the incident, up from the low 80 million won trough recorded during the February selloff.
What the Verdicts Signal for the Remaining Cases
The Seoul Central District Court’s back-to-back rulings on August 26 and August 27 establish an early and persuasive precedent for the two claims still pending, particularly the 500 million won suit that represents the largest single exposure among the four defendants. Legal observers had argued from the outset that Bithumb held strong ground under South Korea’s unjust enrichment doctrine, which has long been applied to mistaken bank transfers, and the initial verdicts appear to align with that reading.
For the broader industry, the ruling reinforces the principle that mistakenly credited crypto is likely to be treated the same way South Korean courts have historically treated mistaken fiat transfers, with a duty to return the value regardless of who caused the error.
For Bithumb, which is continuing to advance its long-planned initial public offering and remains under an active regulatory rehabilitation programme, closing the remaining courtroom exposures from the February incident removes another overhang from both its balance sheet and its supervisory record.
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