Sudden price collapses in cryptocurrency markets rarely occur without leaving confusion in their wake. Traders often confront a swirl of theories before verifiable facts emerge, especially when volatility strikes the world’s largest digital asset. The latest Bitcoin flash crash followed that familiar pattern, triggering intense speculation across global trading communities searching for a clear cause behind the abrupt move.
EasyA co-founder and XRP advocate Dom Kwok quickly entered the conversation, sharing a circulating explanation tied to South Korea’s Bithumb exchange. His remarks amplified an already fast-moving debate and drew renewed attention to how operational events inside a single exchange can ripple through broader market sentiment within minutes.
The Documented Exchange Error
Multiple verified reports confirm that Bithumb mistakenly distributed massive amounts of Bitcoin to users during what should have been a small promotional payout denominated in Korean won.
one explanation for the flash crash yesterday.
an employee at bithumb (korean crypto exchange) accidentally sent 2,000 $BTC to its users instead of 2000 KRW (korean won).
as soon as its users received the bitcoin, they immediately started selling, crashing the price of… pic.twitter.com/2nB5Q2BhNp
— Dom Kwok | EasyA (@dom_kwok) February 6, 2026
Recipients rapidly sold portions of the unexpected holdings, which briefly pushed Bitcoin’s price sharply lower on the platform before stabilization returned. Authorities and the exchange later moved to halt activity, recover funds, and contain the disruption.
Investigations indicate that the vast majority of the mistakenly transferred Bitcoin was successfully retrieved, while officials found no evidence of hacking or an external breach. Regulators nonetheless began reviewing the incident because the scale of the operational failure exposed weaknesses in exchange-level safeguards and risk controls.
These confirmed facts align with the “innocent mistake” interpretation referenced in Kwok’s commentary, demonstrating how human or technical error alone can generate sudden sell pressure and localized price dislocation.
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Competing Narratives and Market Distrust
Alongside the verified explanation, a darker theory quickly circulated online. Some observers speculated that the exchange may have used the error narrative to conceal intentional Bitcoin selling. No credible public evidence supports that claim, and official recovery efforts contradict the idea of coordinated dumping.
Still, the rapid spread of suspicion highlights a deeper issue within cryptocurrency markets: persistent distrust of centralized intermediaries. Even transparent incidents can fuel manipulation theories when transparency across trading venues remains uneven.
Why the Flash Crash Resonates Beyond Bitcoin
The Bithumb episode illustrates how fragile short-term liquidity can become when unexpected supply floods a single marketplace. Although the disruption remained largely contained, the psychological impact traveled far beyond one exchange, reinforcing concerns about custodial risk, operational oversight, and systemic resilience across the crypto ecosystem.
Kwok’s framing ultimately reflects a broader truth about digital-asset markets. Traders must constantly separate verified structural events from rumor-driven narratives, even when both produce identical price swings. The recent flash crash may stem from a straightforward operational failure, yet the persistence of darker interpretations shows that trust—not volatility—remains cryptocurrency’s most sensitive fault line.
Disclaimer: This content is meant to inform and should not be considered financial advice. The views expressed in this article may include the author’s personal opinions and do not represent Times Tabloid’s opinion. Readers should conduct in-depth research before making any investment decisions. Any action taken by the reader is strictly at their own risk. Times Tabloid is not responsible for any financial losses.
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