South Korea's Financial Intelligence Unit (FIU) has handed down its harshest-ever sanction on a cryptocurrency exchange. On March 16, the FIU's sanctions review committee finalized a decision against Bithumb, imposing a 36.8 billion won ($26 million) fine, a six-month partial business suspension, a warning for the representative director, and a six-month suspension for the compliance officer. The penalty marks the most severe regulatory action ever taken against a crypto exchange in the country.
Three Major Violations: KYC Gaps, Illegal Transfers, Record-Keeping Failures
The FIU conducted an on-site inspection of Bithumb from March to April 2025, uncovering approximately 6.65 million violations of anti-money laundering obligations under the Specific Financial Information Act. Investigators identified three categories: first, Bithumb executed 45,772 virtual asset transfers with 18 overseas unregistered virtual asset service providers, breaching rules against dealing with unregistered entities. second, about 6.59 million transactions lacked proper KYC (customer identification) procedures or allowed trading before identity verification—accounting for 99% of all violations. third, 16,000 cases involved failure to store certified identity documents properly, revealing systemic compliance infrastructure weaknesses.
Suspension Timeline: New Customers Blocked, Existing Users Unaffected
The partial suspension runs from March 27 to September 26, 2026—a full six months. Existing customers can trade as usual, but new clients cannot deposit or withdraw external virtual assets during this period. For the fine, the FIU will begin a pre-notice process under the Act on Regulation of Order-Violating Acts, giving Bithumb at least 10 days to submit opinions before finalizing the amount.
Bitcoin Mispayment Probe Escalated to Formal Investigation
On the same day, the Financial Supervisory Service (FSS) announced it had upgraded its preliminary inquiry into the "Bithumb Bitcoin mispayment incident" to a formal inspection. Bithumb now faces simultaneous regulatory pressure from both the FIU's penalty and the FSS's separate probe. As South Korea holds one of the world's largest crypto trading volumes, this case serves as a stark warning to all exchanges: the FIU has demonstrated willingness to deploy maximum sanctions against major platforms, and KYC compliance and anti-money laundering controls are no longer mere formalities.