South Korea Slaps Bithumb Over 6.65 Million AML Compliance Breaches
Key Insights:
- South Korea’s FIU fined Bithumb ₩36.8 billion and imposed a six-month partial business suspension over AML law violations.
- FIU uncovered 6.65 million breaches at Bithumb. These included 3.55 million customer identification failures and 3.04 million limit lapses.
- Bithumb’s CEO received a reprimand warning, while the exchange’s reporting manager was suspended for six months by regulators.
South Korea’s Financial Intelligence Unit fined Bithumb 36.8 billion won ($24 million). It also ordered a six‑month partial suspension of certain business operations.
The action was announced on March 16. It relates to violations of the Act on Reporting and Use of Specific Financial Transaction Information.
The case places one of South Korea’s largest crypto exchanges under strict regulatory scrutiny. Regulators acted after reviewing Bithumb’s Anti-Money Laundering (AML) controls.
The suspension applies only to newly registered users. Local authorities confirmed that existing customers can continue trading and moving funds on the platform. These activities will remain allowed during the sanction period.
The penalty came after the FIU completed inspections covering major domestic crypto exchanges over the 2024 to 2025 period.
Bithumb is South Korea’s second-largest crypto exchange by market position. The case has drawn attention due to the size of the fine and the number of compliance failures cited by regulators.
This action reinforces a broader trend of stricter enforcement in South Korea’s digital asset market. Financial authorities are intensifying reviews of exchange operations to ensure compliance.
South Korea Regulators Cite 6.65 Million Compliance Breaches
According to the FIU, Bithumb committed about 6.65 million breaches of the country’s AML rules. The largest share involved failures in customer identity checks.
Regulators reported 3.55 million violations tied to customer identification obligations. These breaches undermined core know‑your‑customer controls on the financial platform.
Another 3.04 million cases were linked to failures to restrict transactions that should have been blocked under the law.
These controls are used to stop transactions when required compliance checks are incomplete or when certain risk conditions are met. The findings show that the problems were not limited to one part of the exchange’s compliance process.
CEO and Reporting Officer Face Disciplinary Action
The FIU also announced disciplinary measures against senior personnel at Bithumb. The exchange’s chief executive received a reprimand warning.
In addition, Bithumb’s reporting manager was suspended for six months. Regulators decided these measures after reviewing the level of responsibility. They also considered the scale of violations and the degree of non‑compliance found during the inspection.
South Korean regulators also moved against individuals who held oversight duties tied to compliance reporting and internal controls. That approach matches the FIU’s stated focus on accountability within financial institutions that fail to meet AML and reporting requirements.
Authorities tightened oversight after finding compliance gaps across the sector. They focused more closely on identity verification, transaction screening, and internal reporting systems.
In recent enforcement activity, other exchanges have also received warnings, fines, or partial business restrictions.
Enforcement Pressure Across South Korea’s Crypto Sector
The action against Bithumb follows earlier regulatory penalties in the domestic exchange market. Dunamu, the operator of Upbit, was previously fined 35.2 billion won and received a three-month partial suspension over compliance failures.
Another firm, Korbit, received a smaller fine and institutional warnings. These cases show that the FIU is continuing to apply sanctions across multiple exchanges rather than focusing on a single platform.
Bithumb vs Upbit BTC Trade Volume | Source: Kaiko Exchange Volume Data
Bithumb was founded in 2014 and remains one of the best-known crypto trading venues in South Korea.
The latest sanction comes just weeks after Bithumb drew attention for an operational error. The exchange mistakenly distributed bitcoin to users, adding to its regulatory troubles.
That incident was separate from the AML case. However, it added to scrutiny around the platform’s controls and systems.
The post South Korea Slaps Bithumb Over 6.65 Million AML Compliance Breaches appeared first on The Market Periodical.
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