Bithumb Faces Six-Month Partial Suspension Over AML Rule Breaches; Report

TLDR

• South Korea’s FIU sent Bithumb advance notice of a six-month partial suspension.

• The case centers on AML failures, including KYC lapses and overseas operator dealings.

• Existing users can keep trading, while new member transfer services face restrictions.

• Regulators will review final sanctions this month, with Coinone and GOPAX also under review.

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South Korea’s financial authorities have moved against Bithumb with a tough preliminary sanction notice. The action targets anti-money laundering failures and weak customer checks.

The Financial Intelligence Unit, under the Financial Services Commission, notified Bithumb of a proposed six-month partial business suspension. The notice also included disciplinary action aimed at the chief executive.

FIU cites AML and KYC failures

Industry reports said the FIU raised concerns about Bithumb’s dealings with unreported overseas virtual asset operators. Regulators also flagged gaps in customer due diligence procedures.

Those findings placed Bithumb in the same broad enforcement line seen across South Korea’s crypto sector. Authorities have increased scrutiny of exchange controls after recent compliance failures. The sanction remains a preliminary notice, not a final order. Bithumb said the level of punishment could still change during review.

A Bithumb official said, “This measure is not a final sanction, but rather a preliminary notice.” The company added that the restriction targets new members’ virtual asset transfers.

What the partial suspension would cover

The proposed suspension does not shut down the exchange for current customers. Existing users can continue Korean won deposits, withdrawals, and virtual asset trading as usual.

The restriction would apply only to transfer services for new members. That means new users would face limits on moving virtual assets during the sanction period.

This structure is similar to recent action taken against other major exchanges. Last year, Upbit operator Dunamu received a three-month partial suspension and a fine. Korbit also faced a fine and an institutional warning this year.

The FIU is expected to hold a sanctions review committee this month. That meeting will decide the final level of punishment for Bithumb.

Pressure grows after Bithumb system control failure

The latest compliance case follows another damaging episode for the exchange. In February, Bithumb disclosed internal system flaws tied to an erroneous transfer worth more than $40 billion.

Reuters reported that the exchange mistakenly sent about 620,000 Bitcoins during a promotion. The intended payout was a much smaller amount in Korean won.

Bithumb’s chief executive told a parliamentary hearing that internal controls had failed. He said the exchange’s system did not properly match transfers against real holdings.

Most of the Bitcoin was later recovered, but regulators said some coins were sold before accounts were frozen. The case added pressure on both the exchange and the wider sector.

Wider review of South Korean exchanges continues

South Korean regulators are not focusing on Bithumb alone. Sanctions reviews for Coinone and GOPAX are also expected to proceed in sequence.

That pattern points to a broader review of exchange compliance standards. Authorities appear focused on AML controls, customer checks, and transfer monitoring.

For now, Bithumb remains under advance notice rather than final punishment. The market will watch the sanctions committee for the final decision.

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