Bithumb Internal Control Collapse: Assistant Manager’s 60T Won ($46B) Payment Sparks Security Crisis
South Korea’s major crypto exchange Bithumb disclosed a catastrophic internal control failure after a single assistant manager processed a 60 trillion won (~$46 billion) payment without verification. The incident was revealed during a National Assembly hearing in December 2024, where Rep. Min Byoung-dug and Bithumb CEO Lee Jae-won testified that the mistaken Bitcoin disbursements exploited gaps in internal procedures. Two prior smaller mistaken payments were reported and recovered, suggesting systemic governance weaknesses rather than isolated errors. The case highlights lapses in multi-signature authorization, segregation of duties, reconciliation between blockchain records and internal accounts, and audit oversight. It raises regulatory concerns under South Korea’s Virtual Asset User Protection Act (2023), prompting likely increases in audits, stricter custody standards, and calls for multi-layer verification and institutional-grade custody. For traders, the episode may pressure market confidence in centralized exchanges, trigger volatility in KRW-paired markets, and accelerate demand for decentralized or custodial alternatives.
Bearish
The revelation that a single assistant manager could process a 60 trillion won (~$46B) payment without verification undermines trust in centralized exchanges and exposes correlated operational risk. Historically, major exchange crises (e.g., Mt. Gox, Coincheck) triggered immediate sell pressure, liquidity withdrawals, and wider market volatility; internal governance failures often produce sharper confidence shocks because they imply persistent systemic risk rather than a one-off hack. Short-term effects likely include increased withdrawals from Bithumb and other Korean exchanges, KRW-paired volatility, and price declines as risk-off sentiment rises. Medium-term impacts may be sustained lower inflows to centralized venues, higher premiums for institutional-grade custody, and tighter regulatory scrutiny that increases operating costs for exchanges. While stronger custody and audit requirements could improve long-term resilience, the immediate trader reaction is expected to be risk-averse, producing bearish pressure across crypto markets, particularly where Korean liquidity and on‑chain flows matter.