South Korea’s Financial Intelligence Unit has issued a preliminary notice for a six-month partial suspension to cryptocurrency exchange Bithumb over alleged anti-money laundering and know-your-customer failures. The action, which is not yet a final sanction, would restrict new users from transferring assets off the platform. The regulator also issued a heavy reprimand warning to Bithumb’s CEO. This follows similar recent enforcement actions against other major South Korean exchanges.
South Korean regulators have escalated enforcement actions against cryptocurrency exchanges. The Financial Intelligence Unit delivered a preliminary notice for a possible six-month partial business suspension to Bithumb, the country’s second-largest crypto exchange.
The regulator cited alleged failures under anti-money laundering laws, expressing concerns over dealings with unregistered overseas virtual asset service providers and shortcomings in customer due diligence. A Bithumb spokesperson stated, “This measure is not yet a confirmed sanction, but is a pre-notification stage, and there may be some adjustments in the sanctions trial.”
The FIU also issued a reprimand warning to Bithumb’s CEO, a penalty that may lead to restrictions on his future roles. Regulators are expected to hold a sanctions review later in March before deciding on any final measures. If finalized, the suspension would restrict new users from transferring digital assets off the platform.
This scrutiny follows a high-profile incident where Bithumb mistakenly credited users with 2,000 Bitcoin instead of $1.40 worth of Korean won during a promotional event. The error led to a distribution of 620,000 Bitcoin, worth approximately $43 billion at the time.
Recent months have seen South Korean regulators impose stricter sanctions on crypto exchanges suspected of similar violations. In November 2025, the FIU imposed a partial three-month suspension and a $25 million fine on Upbit‘s parent company, Dunamu.
Exchange Korbit also received a warning and a $1.9 million fine in December 2025. Both penalties stemmed from concerns related to dealings with overseas crypto service providers and neglect of customer verification practices.
