Bitcoin price plunges, wipes $1 trillion from value weeks after it hit all-time high
The exchange is reportedly still tracking the "small" portion of BTC that were withdrawn or converted to other currencies, apparently to the tune of $9 million. Furthermore, Bithumb is offering compensation to those who sold BTC during the internal crash, with traders getting the full difference of their orders plus a 10% apology bonus.
South Korean's crypto trading landscape is undergoing a legalization phase, as January 2026 marked the lift of a nine-year ban on public companies investing in crypto assets (with some limitations), as well as the recognition of blockchain-bases securities as financial instruments. There are even upcoming laws for spot crypto ETFs and KRW-pegged stablecoins.
The incident drew comment from Lee Chan-jin, governor of the country's Financial Supervisory Service, who called for added regulatory mechanisms to prevent incidents like Bithumb's, and pointed out that the timing for this event is particularly unfortunate. He reportedly went on to state that the issue of naked selling (or "ghost coins") needs to be fixed in order for cryptocurrencies to be fully comparable to legacy assets.
A devil's advocate may argue that naked short selling is part and parcel of the stock exchange world, and allowed in the U.S with arguably tame consequences . South Korea, China, and the European union, have all made practice illegal. Bithumb and other exchanges are considered brokers and subject to specific naked-sale laws and required to hold over 100% of customer deposits, but this incident highlighted how the current detection mechanisms can fail, as they don't get triggered until an withdrawal or an audit occurs.
Get Tom's Hardware's best news and in-depth reviews, straight to your inbox.
Key considerations
- Investor positioning can change fast
- Volatility remains possible near catalysts
- Macro rates and liquidity can dominate flows
Reference reading
- https://www.tomshardware.com/tech-industry/cryptocurrency/SPONSORED_LINK_URL
- https://www.tomshardware.com/tech-industry/cryptocurrency/south-korean-exchanges-usd40b-bitcoin-mistake-casts-pall-over-countrys-fledgling-crypto-legislation-staffer-fat-fingered-620-000-btc-instead-of-korean-won#main
- https://www.tomshardware.com
- Linux Mint team considers longer gaps between releases in attempt to accelerate development efforts — current six-month cycle means ‘we spend more time testing,
- Nvidia DGX Spark update cuts idle power by 32% or more — hot-plug detection on ConnectX NIC makes for a more efficient AI workstation
- President’s Day blowout brings incredible savings on elite gaming PCs — up to $250 discounts on Ryzen 7 9800X3D and RTX 5080 rigs
- Epic Games brings Secure Boot and TPM to competitive Fortnite — most players unaffected by new measures
- AMD's future 'Medusa Halo' APUs could use LPDDR6 RAM — new leak suggests Ryzen AI MAX 500 series could have 80% more memory bandwidth
Informational only. No financial advice. Do your own research.