If you had a bad day at work recently, know that it can’t be worse than the South Korean employee who almost cost their company over US$40 billion.
What happened: South Korean financial regulators launched an investigation into Bithumb, the country’s second-largest crypto exchange, after an episode last week where the company mistakenly gave away ~$42 billion worth of bitcoin in a promotion gone wrong.
Zoom in: The promo was supposed to let 695 customers win small cash prizes from a pool of 620,000 won ($423). However, an employee who wasn’t on the ball that day input the amount as 620,000 bitcoin, which was over 12 times more than Bithumb’s bitcoin reserves.
Most of the credits were corrected, but Bithumb is struggling to retrieve some $9 million worth of bitcoin users withdrew in the window before the error was detected.
This colossal goof led to calls for Bithumb to overhaul its protections, and the findings of the investigation will likely be used to help craft new digital asset legislation in SK.
Why it matters: Incidents like this are rare, but they show the still-limited protections around crypto assets compared with tightly regulated traditional financial systems, where errors like this are quickly resolved. It’s exactly this sort of authority that is antithetical to the decentralization promise underlying the blockchain. Learning that you can’t have your cake and eat it too is never easy.—QH