Bithumb, South Korea’s second-largest cryptocurrency exchange by trading volume, is reportedly facing a possible partial suspension of operations for up to six months as regulators tighten enforcement of anti-money laundering controls.
South Korea’s Financial Intelligence Unit (FIU) has served Bithumb with a preliminary six-month partial suspension notice for alleged violations of anti-money laundering and know-your-customer policies under the Reporting and Use of Certain Financial Transaction Information Act, According to on Monday’s local media reports. The regulator reportedly cited concerns about working with unregistered foreign virtual asset service providers and customer due diligence deficiencies.
The FIU also reprimanded Bithumb’s CEO, a warning considered a severe punishment that could lead to restrictions on his reappointment or future positions. Regulators are expected to review the sanctions in tardy March before deciding on final measures. Bithumb told News1 that the actions remain in the pre-notification stage and that the scope of possible sanctions may still change.
“This measure is not yet a confirmed sanction, but it is a pre-notification step and there may be some adjustments to the sanctioning process,” a Bithumb spokesperson said, adding that “the restrictions only apply to the transfer (withdrawal) of virtual assets by new members.”
The report states that if the suspension is finalized, fresh users will not be able to transfer digital assets off the platform. Bithumb did not immediately respond to Cointelegraph’s request for comment.
Related: South Korea introduces a limit on shareholders’ shares of cryptocurrency exchanges to 20%: report
The notice follows an examination of South Korea’s Financial Services Commission’s failure to detect critical flaws related to Bithumb’s internal systems after the exchange mistakenly awarded 2,000 Bitcoin (BTC) to each user instead of 2,000 Korean won ($1.40) during a promotional event on February 6, distributing a total of 620,000 BTC (worth approximately $43 billion at the time).
Related: Hacker returns $21 million worth of bitcoin stolen from South Korean authorities: report
South Korean regulators impose stricter money laundering regulations
South Korean regulators are seeking to impose stricter sanctions on cryptocurrency exchanges suspected of AML and KYC violations.
In November 2025, FIU superimposed a partial three-month suspension and a 35.2 billion won ($25 million) fine imposed on Upbit cryptocurrency exchange’s parent company, Dunamu, for similar violations.
Korbit cryptocurrency exchange as well received warning and fine of 2.73 billion won ($1.9 million) in December 2025.
Both administrative penalties stemmed from concerns about dealings with foreign crypto service providers and neglecting customer verification practices.
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