Korea Probes Crypto Exchange Over $40 Billion in ‘Ghost Bitcoin’

South Korea is investigating how cryptocurrency exchange Bithumb initiated an exchange of $40 billion in Bitcoin that it apparently didn’t have.

Regulators have formed a task force to investigate industrywide practices after the Seoul-based exchange on Feb. 6 started crediting accounts with the small fortune rather than the 2,000 won ($1.37) per person authorized for a promotional campaign. The incident stemmed from an employee inputting the payout as Bitcoin rather than won, according to a statement from the Financial Services Commission on Sunday.

The Financial Supervisory Service said on Monday that it was looking into the incident and had initiated ...