South Korean cryptocurrency exchange Bithumb has won two first-instance lawsuits seeking the return of proceeds from Bitcoin mistakenly credited to users during a promotional campaign in February.

The Seoul Central District Court ruled in Bithumb's favor in two separate cases this week. One judgment ordered a user to return approximately 194 million won, while the other involved a claim of roughly 5 million won. Combined, the two rulings cover nearly 199 million won, or about $144,000.

The disputes stem from one of the cryptocurrency industry's largest operational errors this year. During a promotional event, Bithumb mistakenly credited customers with about 620,000 Bitcoin instead of 620,000 Korean won. Erroneous payouts of this kind have surfaced elsewhere in the sector: in 2021, Crypto.com mistakenly sent a customer 10.5 million Australian dollars instead of a 100-dollar refund and later went to court to recover the funds.

Error exposed weaknesses in exchange controls

Bithumb identified the mistake within minutes and restricted trading and withdrawals for affected accounts. The exchange ultimately recovered about 99.7% of the incorrectly credited Bitcoin. However, some customers had already sold their Bitcoin before the restrictions took effect, prompting Bithumb to pursue legal action against users who did not return the proceeds from those sales.

The exchange filed four civil lawsuits in March. The two cases decided this week represent the first court victories in that recovery effort. The rulings align with a long-standing principle of South Korean civil law, under which a person who receives money or assets through another's mistake is generally obligated to return the benefit under the doctrine of unjust enrichment.

Two claims remain pending

The remaining lawsuits involve claims of approximately 14.8 million won and 500 million won. Their outcomes could further determine how South Korean courts treat users who profit from assets mistakenly credited by cryptocurrency exchanges. As first-instance decisions, this week's rulings may still be appealed.

The February incident also prompted scrutiny from South Korean financial authorities. Regulators investigated Bithumb's internal controls after the error briefly caused a sharp Bitcoin price disruption on its platform. The scrutiny comes against the backdrop of South Korea's Virtual Asset User Protection Act, in force since July 2024, which requires exchanges to safeguard customer assets and grants financial authorities sanction powers over operators.

The court victories give Bithumb stronger legal footing as it continues efforts to recover funds from the incident. They also highlight the financial and legal consequences exchanges can face when operational controls fail, even when most mistakenly distributed assets are recovered quickly.