Bithumb Moves to Freeze Bitcoin Amid Legal Dispute with Non-Compliant Users: Report

South Korean cryptocurrency exchange Bithumb has sought court approval to freeze 7 BTC that remain unrecovered following a payout blunder earlier this year. This situation intensified after a handful of users refused to return the funds. As reported by local media outlet 'Chosun Biz,' Bithumb has initiated a provisional seizure, a legal action that temporarily secures assets prior to the filing of a formal civil lawsuit. This development follows a February incident in which the exchange mistakenly distributed Bitcoin instead of Korean Won (KRW) during a promotional event. Bithumb originally intended to disburse a total of 620,000 won to 249 participants, with individual payouts between 2,000 and 50,000 won. However, due to a data entry error, the payments were processed in BTC, resulting in an erroneous transfer of nearly 620,000 BTC—worth tens of trillions of won. Although Bithumb swiftly reversed the transactions, it failed to fully recover the distributed assets as some recipients had already sold the BTC or used it for other digital purchases. While the exchange has contacted affected users to retrieve most of the mistakenly issued funds, a small group has opted not to return the remaining amount, prompting the current legal escalation. Industry insiders report that some users claim the error was the exchange's fault and argue that they're not liable to return the assets. However, legal experts deem this case one of unjust enrichment, emphasizing that recipients are obligated to return mistakenly received assets. Authorities have warned that those who converted the Bitcoin to cash may encounter further complications if legal proceedings progress. At the time of the incident, Bitcoin prices on Bithumb briefly dipped to the low 80 million won range, whereas current prices hover around 105 million won. This poses a potential challenge for users who sold at lower prices, as they may now need to repurchase Bitcoin at elevated rates to comply with court orders.