South Korea’s Seoul Administrative Court has granted Bithumb a temporary reprieve from a six-month suspension, allowing the exchange to continue operating while the case proceeds.
Summary
- Seoul Administrative Court has paused Bithumb’s six-month suspension, allowing operations to continue until a final ruling.
- Regulators imposed a 36.8 billion won fine after identifying about 6.65 million cases of failed user identity checks.
- Ongoing scrutiny has intensified after a payout error, and AML violations triggered multiple investigations into Bithumb’s controls.
According to Yonhap News Agency, the court’s 2nd Administrative Division under Judge Gong Hyeon-jin approved the stay on Thursday, pausing enforcement of a sanction imposed by the Financial Intelligence Unit, an anti-money laundering body under the Financial Services Commission.
Regulators had issued the suspension notice in March, stating that Bithumb failed to meet AML obligations that required proper identity verification of users. The penalty targeted new customers by restricting external crypto deposits and withdrawals, a move that would have limited onboarding activity if enforced.
The Financial Intelligence Unit also imposed a fine of 36.8 billion won, about $25 million, after identifying roughly 6.65 million cases where user identities were not properly verified, according to The Korea Herald. Disciplinary measures were also directed at CEO Lee Jae-won as part of the same action.
Court filings show Bithumb challenged both the suspension and its execution, submitting a lawsuit and a stay request on March 23. Enforcement had already been paused during judicial review, and the latest decision keeps restrictions on hold until a final ruling is issued, leaving day-to-day operations unaffected for now.
Company statements cited by Yonhap indicated that the suspension could slow new user growth and weigh on business activity, while the FIU maintained that any revenue impact would be limited. Payment of the fine remains pending more than four weeks after the deadline, despite a 20% early settlement discount offered by the regulator, The Korea Herald reported.
“We plan to faithfully present our position throughout the remaining legal proceedings,” Bithumb said, according to local media reports.
Regulatory pressure deepens after operational missteps
Regulatory scrutiny has intensified following a series of operational issues, including a February payout error that triggered investigations into internal controls. During a promotional campaign, the exchange mistakenly distributed a theoretical 620,000 BTC instead of 620,000 won, an error that led to unintended credits reaching external wallets.
According to local outlet Chosun Biz, Bithumb recovered about 99.7% of the assets, while the remaining portion was addressed using company reserves after some users sold the funds. Legal action has since been initiated against certain users who refused to return the assets, with provisional seizure requests filed to freeze holdings ahead of civil proceedings.
Authorities responded to the incident by tightening oversight across the sector. The Financial Services Commission directed exchanges to strengthen real-time monitoring of large transactions after an emergency inspection identified vulnerabilities in automated settlement systems.
Alongside the regulatory challenges, Bithumb has pushed its planned initial public offering timeline to 2028, citing ongoing scrutiny, while investigations by the Financial Supervisory Service continue to examine risk management practices tied to the payout error.
