Bithumb Receives Preliminary Sanctions Notice: South Korean cryptocurrency exchange Bithumb has received a preliminary notice of disciplinary action from financial authorities, including a proposed six-month partial suspension of business operations and sanctions against its chief executive officer.
FIU Cites AML Violations
According to report on March 9, the Financial Intelligence Unit (FIU) under the Financial Services Commission issued the advance notice after identifying violations related to anti-money laundering (AML) obligations under the Specific Financial Information Act.
Concerns Over Overseas Transactions and KYC Compliance: Regulators reportedly raised concerns about Bithumb’s transactions with overseas virtual asset operators that had not been properly reported to authorities. The FIU also cited shortcomings in the exchange’s customer due diligence procedures, commonly known as Know Your Customer (KYC) checks.
Proposed Six-Month Partial Suspension and CEO Sanctions: Based on these findings, the FIU notified the exchange of its intention to impose a six-month partial suspension of certain operations and disciplinary measures against the company’s CEO. The notice currently represents a preliminary stage of the enforcement process, allowing the exchange an opportunity to respond before a final decision is made.
Restrictions Expected to Apply Only to New Users
Despite the proposed sanctions, the restrictions are expected to apply only to new users. Existing customers would still be able to deposit and withdraw Korean won and continue trading virtual assets without interruption.
Sanctions Review Committee to Decide Final Penalties: Financial authorities are expected to convene a sanctions review committee later this month to determine the final level of penalties against Bithumb. Reviews concerning other domestic crypto exchanges, including Coinone and GOPAX, are also expected to proceed sequentially.
Previous Regulatory Actions Against Crypto Exchanges: Similar enforcement actions have been taken against other major South Korean exchanges in the past. Last year, the FIU imposed a three-month partial suspension and a fine of 35.2 billion won on Dunamu, the operator of Upbit, over related compliance issues. Earlier this year, another exchange, Korbit, received an institutional warning and was fined 2.73 billion won.
Bithumb Responds to Preliminary Notice
Bithumb stated that the notice does not represent a final decision. The company said it plans to present explanations regarding past shortcomings and highlight its efforts to improve compliance during the official sanctions review process.
