South Korean Lawmakers Grill Bithumb CEO Over ‘Ghost Bitcoin’

South Korean lawmakers hauled in Bithumb’s chief executive officer on Wednesday seeking answers over an erroneous $40 billion Bitcoin transfer triggered by human error, intensifying scrutiny of a crypto market that has eclipsed equities in retail participation.

At a parliamentary hearing, legislators pressed Bithumb CEO Lee Jae-won over a lack of internal controls after an employee mistakenly processed customer payouts in Bitcoin rather than won during a promotional event last week.

“Bithumb gave away Bitcoin that were not in the company’s possession, and that is what we call naked short selling,” Min Byeong-deok, a lawmaker from the ruling Democratic Party, ...