Seoul, Feb 10 || Financial authorities began a formal investigation on Tuesday into Bithumb, a local crypto exchange, to determine how it was able to pay out over 60 trillion won ($41.2 billion) in bitcoins it apparently did not have, industry sources said.
Regulators informed the crypto exchange Monday that an investigation will be conducted, three days after they conducted an on-site inspection, according to the sources, reports news agency.
"We are taking this case very seriously," an official from the Financial Supervisory Service (FSS) said. "The FSS will take stern legal actions against acts that harm the market order."
On Friday, Bithumb erroneously sent 620,000 bitcoins, instead of the 620,000 won originally planned, to 249 customers in a promotional event, triggering a sell-off at the exchange.
Most of the mis-sent bitcoins were retrieved immediately after the accident, but 1,788 tokens were already sold off, the crypto exchange said in a statement.
Centralised exchanges like Bithumb use a "book-entry trading system," in which exchanges record ownership and execute trades electronically within their internal databases, rather than recording every transaction on the public blockchain.