South Korean regulators are turning up the pressure on major crypto exchange Bithumb following allegations of false advertising and other consumer concerns. The Fair Trade Commission launched its probe on February 4, 2026, by sending two investigators to Bithumb’s headquarters in Seoul’s Gangnam District. The watchdog is examining a claim that Bithumb had the highest liquidity among domestic crypto exchanges, a discrepancy that raised red flags under South Korea’s Fair Labelling and Advertising Act. Dunamu, the operator of Upbit, is under scrutiny for potentially blocking rivals from trading its unlisted stocks.
Regulators are examining the liquidity claim and related disclosures as part of a broader push to regulate crypto firms operating in a regulatory grey area. In addition, Dunamu’s handling of its unlisted shares, with stock transactions allegedly limited to its own Stockplus platform, could violate fair-trade laws prohibiting unfair refusals of transactions. This scrutiny reflects a wider effort to ensure market access and consumer protection in the crypto sector.
South Korea’s crypto exchanges have delivered substantial profits while largely escaping the tight oversight applied to banks and brokerages. Bithumb’s profits surged 3,285 percent, reaching 105.4 billion won, despite the firms not yet being classified as financial institutions. Kim Dae-jong, a professor at Sejong University, said Korea should pursue a longer-term approach rather than sticking to the regulation-first stance, pointing to the United States where crypto innovation is often embraced. These actions signal that authorities are moving toward treating so-called quasifinancial firms more seriously.
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