South Korean crypto exchange Bithumb has begun legal action to recover bitcoin distributed in error during a February promotional event, escalating a dispute with a small group of users who have refused to return the funds.

According to a report from local outlet Chosun Biz, the exchange has filed for a provisional seizure to freeze accounts holding roughly 7 BTC, valued near $500,000. The measure allows a court to secure assets before a civil lawsuit proceeds and signals that formal litigation may follow.

The incident traces back to Feb. 6, when Bithumb intended to distribute 620,000 Korean won in rewards to 249 users. A staff member entered “BTC” instead of “KRW,”…

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