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Bithumb Fat-Finger Error: 2,000 BTC Mistakenly Credited, Triggering Local Flash Crash

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21Shares Introduces JitoSOL ETP to Offer Staking Rewards via Solana

TLDR

  • Bithumb mistakenly credited 2,000 BTC to hundreds of users, triggering a flash crash.
  • Bitcoin briefly traded 10% below global prices due to sudden localized sell-offs.
  • Exchange reserves limited withdrawals, preventing larger-scale market disruption.
  • Immediate action by Bithumb aimed to recover wrongly deposited BTC and stabilize trading.

 

Bithumb fat-finger error briefly sent Bitcoin prices tumbling on the exchange after a system mistake credited around 2,000 BTC (~$130 million) to users instead of the intended 2,000 KRW reward, triggering large sell orders and a local flash crash before prices rebounded.

Prices on Bithumb sank to roughly ₩81.1 million, far below other markets, before stabilizing.

Accidental Bitcoin Distribution and Market Reaction

Bithumb, South Korea’s second-largest cryptocurrency exchange, mistakenly deposited around 2,000 BTC into hundreds of user accounts.

Reports indicate a staff member intended to send a 2,000 KRW reward, but accidentally selected BTC as the currency.

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Once the Bitcoin landed in user accounts, some recipients quickly sold it, likely anticipating recovery actions by the exchange. This sudden sell-off caused Bitcoin on Bithumb to trade nearly 10% below global market levels. 

The local market experienced a sharp liquidity shock rather than a broader Bitcoin decline. One-minute trading charts show a near-vertical drop, followed by a long downside wick, reflecting the sudden surge in sell orders. 

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Arbitrage traders and automated bots quickly responded, buying BTC at prices significantly lower than those on other exchanges. The bounce back in price demonstrates short-term market corrections due to mispricing rather than a return of investor confidence.

Users on social media reported the flash crash in real time, noting the extreme volatility. The combination of human error, thin order books, and automated trading created a brief but dramatic market distortion. 

The incident highlights the speed at which operational errors can impact local exchange markets.

Exchange Reserves and Recovery Measures

Despite the massive credited amount, Bithumb’s actual Bitcoin reserves prevented full withdrawals. The exchange reportedly holds about 50,000 BTC, limiting the possibility of large-scale asset outflows despite system-recorded deposits far exceeding actual holdings.

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More than 500 BTC were sold immediately, causing price disruption, but a broader market collapse was avoided. The exchange acted quickly by suspending deposits and withdrawals and inspecting servers. 

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Bithumb confirmed that most wrongly deposited BTC could be recovered, although assets already sold or transferred overseas may be difficult to reclaim fully.

Regulatory scrutiny is ongoing, as Bithumb faces potential fines related to anti-money laundering compliance. The incident occurred amid volatile Bitcoin markets, emphasizing that centralized exchanges are single points of operational risk. 

Even minor errors, such as event reward distributions, can lead to rapid price swings and localized market instability.

The episode provides a clear example of how technical mistakes intersect with liquidity and trading behavior. While the immediate threat was contained, the incident shows the vulnerabilities that centralized exchanges face when internal controls fail.

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Oil Rose 3% to Open the Week: Here’s What Moved the Market on Monday

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Oil prices jumped more than 3% on Monday, pushing Brent crude above $116 a barrel. West Texas Intermediate (WTI), the US benchmark, climbed to roughly $102 per barrel.

The latest rise comes as the US-Israel war on Iran entered its fifth week with no signs of abating.

Oil Extends Its War-Fueled Rally 

Several escalatory developments over the weekend fueled the surge. President Donald Trump told the Financial Times he could possibly seize Kharg Island, the terminal that handles roughly 90% of Iran’s crude exports.

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The US president struck a mixed tone on diplomacy with Iran, saying he was “pretty sure” of making a deal with Iran but conceding that talks could still collapse.

Meanwhile, Iran’s parliament speaker warned that Tehran would “set them on fire” when American forces arrived and promised consequences for US-allied nations in the region. 

The oil price surge is far from over, according to market analysts, who warn that the prolonged closure of the Strait of Hormuz could drive crude even higher.

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“A scenario in which the Strait remains closed for an additional month would be consistent with oil prices rising towards $150/bbl and constraints on industrial consumers of energy supply,” Bruce Kasman, global head of economics at JPMorgan, said.

According to Bloomberg, US officials and Wall Street analysts have also begun discussing the possibility of crude reaching $200 per barrel.

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Asian Stocks Tumble, Crypto Feels the Pressure

The energy shock rippled across Asia. Google Finance data showed that Japan’s Nikkei 225 fell over 4.5%, while South Korea’s KOSPI dropped more than 4.3% as import-dependent economies repriced risk.

The volatility has spread to crypto markets, with asset prices dipping early in the morning before rebounding. 

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“The market briefly crashed just now — ETH dropped below $1,940 and BTC fell below $65,000,” Lookonchain reported.

Oil above $100 per barrel continues to pressure risk assets by fueling inflation expectations and delaying anticipated Federal Reserve rate cuts.

The post Oil Rose 3% to Open the Week: Here’s What Moved the Market on Monday appeared first on BeInCrypto.

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Lido DAO Mulls $20M LDO Buyback to Boost Token Price

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Lido DAO Mulls $20M LDO Buyback to Boost Token Price

Lido’s decentralized autonomous organization is considering a one-off $20 million buyback of its governance token to address so-called price dislocation, which is at “historically depressed levels” relative to Ether, according to the DAO. 

The proposal, submitted Friday, seeks permission to swap 10,000 Lido Staked Ether (stETH) tokens, currently worth $20 million from the DAO’s treasury for Lido DAO (LDO), arguing that LDO is undervalued.

“This is not a routine fluctuation. It represents one of the most significant dislocations between LDO’s market price and its underlying protocol fundamentals in the token’s history.”

A token buyback of this size could boost the price of the token, which has fallen roughly 96% from its all-time high. In November, a Lido DAO member pitched an automated buyback mechanism for LDO to improve the token’s price. However, that proposal hasn’t been implemented.

LDO’s change in price relative to ETH since 2024. Source: Lido DAO

Lido DAO pointed out that LDO is trading at a steep discount to Ether (ETH) at a ratio of 0.00016, roughly 63% below its two-year median.

This is despite the protocol holding the top spot of the Ethereum liquid staking market, with a 23.2% share of staked Ether, according to Dune Analytics data. The protocol’s dominance has even been flagged as a centralization risk to the network in previous years.

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Share of Ethereum network validators. Source: Dune Analytics

Related: Ethereum builders propose ‘economic zone’ to tackle L2 fragmentation 

LDO is currently trading at $0.30, down 95.9% from its $7.30 high set in August 2021, according to CoinGecko data. LDO’s $255 million market cap makes it the 141st largest token by value at the time of writing.

“That dislocation is not justified by a proportional deterioration in protocol performance,” Lido DAO said. 

Lido DAO proposes buying stETH in batches

Lido DAO proposed buying up to 10,000 stETH in smaller batches of 1,000 to buy LDO. 

Lido DAO said it would use limit orders or adopt a dollar-cost averaging strategy to avoid market volatility. 

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