A South Korean court has granted Bithumb a temporary reprieve, suspending a six-month partial business suspension imposed by the Financial Intelligence Unit (FIU) and allowing the exchange to continue normal operations while the broader legal dispute unfolds. The Seoul Administrative Court’s 2nd Division accepted Bithumb’s injunction request on April 30, effectively pausing the penalty that was set to block new customer onboarding and severely restrict transfer services.
Regulatory penalties and legal challenges
The FIU, the anti-money laundering body under the Financial Services Commission (FSC), had levied a six-month partial suspension and a 36.8 billion won fine (approximately $24.6 million) against Bithumb in March after investigators found roughly 6.65 million violations of the Specific Financial Information Act. These included failures in customer identity verification and unauthorized transactions with unregistered overseas crypto operators. Bithumb filed an administrative lawsuit challenging the FIU’s order and requested a stay of execution just days before the March 27 scheduled start date, which the court has now granted pending a final decision.
This comes after a similar ruling earlier this month where the same court canceled a three-month suspension and a 35.2 billion won fine against Dunamu, operator of Upbit, on grounds that Dunamu had taken reasonable compliance steps. The FIU has appealed that decision. Coinone, another major exchange, is also contesting sanctions. Broader regulatory scrutiny in South Korea continues, with the Personal Information Protection Commission launching an investigation into Upbit, Bithumb, and other platforms over sharing order books with overseas exchanges.
Bitcoin distribution error drives separate legal pressure
Beyond the FIU penalty, Bithumb faces a second and potentially more damaging investigation stemming from a massive operational error on February 6. During a promotional event, an internal system error caused the exchange to distribute 2,000 Bitcoins to each eligible user instead of the intended small rewards. With Bitcoin valued at roughly 98 million won per coin at the time, the total mistaken distribution reached approximately 62 trillion won. This triggered immediate selling pressure on Bithumb, driving Bitcoin prices down to around 81.11 million won—an approximate 17% discount relative to other exchanges—during a roughly 10-minute window of intense trading.
The incident prompted the FSC to tighten monitoring requirements across all major exchanges. Precedent reconciliation checks that occurred once every 24 hours must now be performed every five minutes, with automatic trading halts triggered by large mismatches. Monthly audits have replaced the previous quarterly schedule, and manual payouts now require third-party verification. Exchanges must also appoint a Risk Management Officer and form a Risk Management Committee.
Compensation plan and legal risks
In response, Bithumb launched a compensation plan covering 100% of user losses plus an additional 10% payment. It also offered fixed payments of 20,000 won to users logged in during the incident window and reimbursements for trades executed during that period. However, legal experts continue to evaluate potential claims from affected users. A Seoul-based law firm confirmed receiving multiple inquiries, though the number of cases has not yet reached the threshold required for a formal class action lawsuit.
Bithumb now confronts overlapping regulatory enforcement, a massive compensation effort, and rising legal uncertainty, all of which cloud its long-term market position despite the temporary court victory.
