SEOUL: A routine promotional campaign at South Korean cryptocurrency exchange Bithumb spiralled into chaos after a technical error briefly sent tens of billions of dollars' worth of bitcoin to users, prompting a sharp selloff and an emergency trading halt.

Bithumb said on February 7 it had mistakenly distributed more than US$40 billion worth of bitcoin as rewards to customers, instead of small cash incentives planned for the event. The exchange apologised for the incident and said it had recovered 99.7 percent of the 620,000 bitcoins involved, valued at about $44 billion at current prices.

The mistake affected 695 customers. Bithumb said it restricted trading and withdrawals for those accounts within 35 minutes of the erroneous distribution on Friday, helping to limit losses and claw back most of the digital assets.

The exchange had intended to give users small promotional payouts of at least 2,000 Korean won ($1.37). Instead, winners received at least 2,000 bitcoins each, according to media reports — a windfall that far exceeded the scale of the promotion and briefly rattled the local market.

Bitcoin prices on Bithumb slid sharply following the error, briefly dropping 17 percent to 81.1 million won on the evening of February 6, exchange charts showed. Prices later rebounded and were last trading at 104.5 million won.

Bithumb moved quickly to reassure customers and investors that the incident was not the result of a cyberattack.

"We would like to make it clear that this incident is unrelated to external hacking or security breaches, and there are no problems with system security or customer asset management," the exchange said in a statement.

Bithumb is one of South Korea's largest cryptocurrency trading platforms, though it trails Upbit, the dominant player in the country's crypto market.