Bithumb has moved to freeze Bitcoin (BTC) held by users who refused to return funds mistakenly sent during a promotional payout error. The exchange is targeting 7 BTC still unaccounted for after recovering most of the mispaid assets. The case is now shifting into legal territory, with a civil lawsuit likely to follow.

Bithumb Error Triggers Legal Escalation

According to an April 9 report by Korean media outlet Chosun Biz, the issue traces back to a February 6 event where Bithumb intended to distribute small cash rewards totaling 620,000 won (around $417). 

Instead, a system error processed the payouts in Bitcoin, briefly sending out roughly 620,000 BTC before the transactions were reversed.

Although the exchange acted quickly, not all funds were recovered. Some users sold the Bitcoin or swapped it for other assets. Others refused to return what they received, arguing the mistake was on the company.

Bithumb has since applied for a provisional seizure, a legal measure that freezes assets ahead of a lawsuit. This step suggests the exchange is preparing to pursue formal legal claims to recover the remaining Bitcoin.

Users Face Risk as Bitcoin Price Moves

Legal experts say the case is simple. Funds received by mistake typically qualify as unjust enrichment, which means recipients are expected to return them.

The complication comes from price changes. At the time of the incident, Bitcoin traded around 80 million won ($53,850) on Bithumb, but it has since climbed to roughly 105 million won. That gap could leave users who sold early needing to buy back Bitcoin at a higher price to repay what they owe.

Authorities have also warned that converting the funds into cash may increase legal exposure, especially if court proceedings confirm the obligation to return the assets.

For Bithumb, the move is about closing the final gap in a costly operational mistake. For users who held onto the funds, the situation is turning from a windfall into a potential liability.