South Korea's Financial Intelligence Unit (FIU) has issued a pre-notification of sanctions against crypto exchange Bithumb, proposing a six-month partial business suspension and disciplinary action against its CEO. The move follows similar enforcement actions against other major Korean exchanges in a sweeping anti-money laundering (AML) compliance crackdown.
Key Violations: KYC Lapses and Cross-Border Transactions
The FIU investigation found Bithumb guilty of two main violations: failure to properly verify customer identities (KYC), allowing users to trade without completing full verification in breach of the Specific Financial Information Act; and engaging in transactions with offshore virtual asset service providers that had not registered with the FIU, heightening cross-border money laundering risks. The exchange also reportedly delayed or omitted reporting suspicious transactions.
Scope of Penalty: New Member Withdrawals Only
Bithumb stated the proposed partial suspension would only restrict new members from withdrawing virtual assets, mirroring a similar penalty against Upbit. Existing users' fiat and crypto deposits, withdrawals, and trading remain unaffected. Bithumb can submit objections before the FIU's Sanctions Review Committee delivers a final ruling on March 16.
Korea's Top 5 Exchanges Under AML Scrutiny
Since 2025, the FIU has been auditing the five major won-based exchanges: Upbit, Bithumb, Coinone, Korbit, and GOPAX. So far, Upbit (Dunamu) received a 3-month partial suspension and a 35.2 billion won ($25 million) fine (now suspended via litigation); Korbit was fined 2.73 billion won and given a warning; and Bithumb faces a longer 6-month suspension plus CEO accountability. Coinone and GOPAX results are pending. For Bithumb, which is actively pursuing a US IPO, the penalty adds uncertainty ahead of its planned listing.