Bithumb reportedly received a preliminary notice from South Korea’s FIU regarding a proposed six-month partial suspension and a reprimand for its CEO. The notice cites alleged violations for poor AML-KYC enforcement and transactions with unregistered overseas platforms. The suspension would only restrict virtual asset transfers for newly registered users, not affecting existing customer operations. Regulators said Bithumb continued transactions with overseas virtual asset businesses that were not registered in South Korea and failed to properly enforce certain Know Your Customer procedures.
The decision isn’t final and may change during a review process. The FIU plans to hold a sanctions deliberation committee later this month to determine the final penalty. The case comes as South Korean regulators tighten oversight of digital asset platforms.
Last year, the FIU imposed a three-month partial suspension and a 35.2 billion won fine on Dunamu, the operator of Upbit, for similar compliance failures. Korbit received a similar 2.73 billion won fine and an institutional warning as well. Founded in 2014, Bithumb is one of South Korea’s largest exchanges and ranks second in domestic trading volume behind Upbit according to CoinGecko data. The sanctions come after last month Bithumb mistakenly distributed billions of dollars worth of bitcoin to users, prompting the country’s financial watchdog to step up oversight.
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