In a landmark enforcement action, South Korea's Financial Intelligence Unit (FIU) has imposed severe penalties on Bithumb, one of the nation's largest cryptocurrency exchanges. The regulatory body issued a six-month partial suspension of business operations alongside a staggering fine of 36.8 billion won, equivalent to approximately $26.6 million.
The penalties follow a comprehensive investigation that identified approximately 6.65 million violations of the country's Specific Financial Information Act. The FIU found critical deficiencies in Bithumb's anti-money laundering (AML) and know-your-customer (KYC) protocols. Specifically, about 3.55 million violations involved failures to carry out required customer identity verification, while 3.04 million were related to the exchange's failure to properly block transactions that should have been blocked.
The partial suspension will primarily affect services for newly registered users, while existing customers will reportedly still be able to trade and move funds on the platform. Bithumb must implement corrective measures under FIU supervision during the six-month period. Regulators also issued personnel penalties: Bithumb's chief executive received a reprimand warning, and the exchange's reporting officer was suspended for six months.
This enforcement action stems from on-site inspections conducted between 2024 and 2025 on South Korea's five largest crypto exchanges: Upbit, Bithumb, Coinone, Korbit, and Gopax. The fine against Bithumb represents one of the largest financial penalties in South Korean crypto history, exceeding previous actions such as the 35.2 billion won fine and three-month partial suspension handed to Upbit operator Dunamu in the previous year.
Financial regulation experts emphasize the broader significance of this action. Professor Kim Jae-hyun of Seoul National University noted, "The FIU's decision reflects maturation in South Korea's regulatory approach. Initially, authorities focused on establishing basic frameworks. Now they're actively enforcing those standards with substantial penalties."
The enforcement aligns with South Korea's progressive tightening of cryptocurrency regulations since 2021, particularly following high-profile incidents like the Terra-Luna collapse that significantly impacted Korean investors. The current regulatory framework emphasizes real-name account verification, enhanced transaction reporting, mandatory reserve requirements, and strict listing standards for newly offered cryptocurrencies.
