South Korea’s Financial Intelligence Unit has issued a preliminary sanctions notice to cryptocurrency exchange Bithumb for alleged anti-money laundering compliance failures. The notice outlines potential penalties, including a six-month suspension of crypto transfers for new users and questioning of the CEO. Existing customers would reportedly retain full trading, deposit, and withdrawal capabilities.
The Financial Intelligence Unit issued a preliminary sanctions notice to Bithumb under South Korea’s Special Financial Transactions Act. This notice outlines potential disciplinary measures, including a six-month partial business suspension and questioning of the company’s chief executive.
Regulators focused on the exchange’s compliance with anti-money-laundering obligations. Authorities believe the platform did not adequately enforce customer verification requirements in certain transactions.
The FIU flagged cases involving trading activity linked to overseas virtual asset operators. In these cases, identity verification procedures were reportedly insufficient.
Officials determined that Bithumb allowed some trades involving foreign virtual asset operators without proper verification measures. Such activity raised concerns that compliance standards were not fully maintained.
This is not the first regulatory action against the exchange. Last year, the FIU handed Bithumb a three-month business suspension and a fine of approximately $260 million over similar concerns.
At the start of the year, another Korean exchange, Korbit, was handed a fine of about $200,000 and an institutional warning. These actions reflect consistent regulatory scrutiny on compliance standards within the country.
If the new sanctions are implemented, they would affect virtual asset transactions involving new registered members. Existing members would still be able to deposit, withdraw, and trade between the Korean Won and virtual assets.
Regulators are expected to convene a sanctions committee within the month to decide the extent of the penalty. Following this decision, regulators may proceed with cases against other exchanges like Coinone and Gopax.
