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Cryptocurrency Double Shock: South Korea's 40 Billion Bitcoin Blunder, Domestic 8 Departments Heavy-handed Regulation

From February 6 to 8, 2026, the cryptocurrency market faced a series of significant events, including a major operational blunder worth billions at a South Korean exchange, while eight domestic departments simultaneously ramped up regulation of virtual currencies, compounded by a sharp decline in Bitcoin prices, leading to intense fluctuations in market sentiment.

On the evening of February 6, South Korea's leading exchange Bithumb experienced a major operational error, where employees accidentally input Bitcoin as the unit of reward instead of Korean Won during a user welfare activity, mistakenly distributing 620,000 Bitcoins to 695 users, equivalent to over 40 billion USD. Some users took the opportunity to sell off their assets, causing the price of Bitcoin on the platform to plunge 17% within 17 minutes. The platform initiated an emergency response 20 minutes later, freezing the involved accounts. As of the afternoon of the 7th, 99.7% of the assets had been recovered, with only 132 million USD suspected to have been transferred to an anonymous wallet. The platform promised full compensation to affected users, and the South Korean Financial Supervisory Service has begun an investigation.

On the same day, the People's Bank of China and eight other departments jointly issued a statement, clarifying that all domestic virtual currency-related businesses are illegal financial activities, completely prohibiting the domestic implementation of RWA tokenization, and strictly banning the issuance of stablecoins pegged to the Renminbi from abroad. They will also impose strict management and record-keeping on domestic entities' overseas-related businesses, and establish a joint regulatory mechanism to crack down on activities such as mining, fraud, and money laundering.

This regulatory crackdown coincided with a continued decline in Bitcoin's price, which has fallen over 40% from its peak of 120,000 USD on October 12 last year, dropping below 70,000 USD on the 6th, with more than 110,000 investors liquidated in a single day, totaling over 400 million USD. Industry insiders noted that this incident exposed the shortcomings in risk control within the cryptocurrency industry. While blockchain traceability aids in asset recovery, the industry is accelerating its transition to compliance, with platform risk control and regulatory compliance becoming core priorities. Ordinary investors need to be wary of the dual risks of price and operational fluctuations.