In a significant escalation of regulatory enforcement within South Korea's cryptocurrency sector, two major exchanges are facing serious legal and compliance challenges. Bithumb has initiated provisional seizure proceedings to recover 7 Bitcoin (worth approximately $520,000 or 700 million Korean won) that were mistakenly distributed to users during a February 2025 promotional or operational event. Despite recovering most of the erroneously transferred funds, the exchange is pursuing legal action against customers who refused to return the remaining 7 BTC.
The Bithumb case centers on the legal principle of "unjust enrichment," with industry experts and legal professionals asserting that recipients of mistaken transfers cannot claim legal ownership. The exchange's decision to file for a provisional seizure—a legal mechanism to secure assets before a final court judgment—indicates preparation for a formal civil lawsuit. This move is particularly significant given South Korea's stringent crypto regulations, including real-name account verification, which enhances traceability and strengthens the exchange's legal position.
Simultaneously, Coinone has received a preliminary notice from South Korea's Financial Intelligence Unit (FIU) for critical anti-money laundering (AML) violations, potentially resulting in a three-month partial suspension of business operations. The Sanctions Review Committee is set to determine the final penalty on April 13, 2025, with industry sources predicting financial penalties ranging from 8 to 13 billion won ($5.8-9.4 million).
Coinone's alleged violations include failures in customer due diligence procedures, inadequate transaction monitoring systems, and insufficient reporting of suspicious transactions as required under the Financial Transactions Report Act. This action follows a pattern of increasing regulatory enforcement, with Bithumb fined 1.9 billion won in 2023 for similar compliance failures and Upbit facing partial suspension in 2021.
The dual developments underscore South Korea's rigorous approach to cryptocurrency regulation, which has progressively tightened since 2021 with the implementation of the Travel Rule in March 2022 and the Specific Financial Information Act. These cases demonstrate regulators' willingness to employ both financial penalties and operational suspensions to enforce compliance, reflecting a global trend toward stricter oversight of virtual asset service providers.
