South Korea’s Financial Intelligence Unit, or FIU, has proposed a six-month partial suspension for crypto exchange Bithumb, limiting its ability to onboard new users and restricting transfers to external wallets. Based on the current notice, existing customers would still be able to trade and use won-denominated deposit and withdrawal services.
FIU cites AML and customer verification failures
The regulator’s investigation identified three core weaknesses in Bithumb’s financial transaction oversight. It pointed to weak anti-money laundering policies, shortcomings in customer identification and verification procedures, and business dealings with unregistered foreign crypto platforms. Investigators also flagged delayed and insufficient suspicious transaction reporting, a finding that suggested deeper control problems rather than isolated operational mistakes.
The proposed measure stops short of a full shutdown. Its structure is narrow but consequential: cut off new inflows, reduce the risk tied to external transfers, and keep basic services running for existing users. For a major exchange, those limits hit two sensitive areas at once—customer acquisition and asset mobility.
Regulatory pressure reaches the executive level
The FIU also recommended an official warning for Bithumb’s chief executive. According to the report, that kind of sanction could legally affect future appointments to major roles in the financial sector. The case shows that regulatory scrutiny in South Korea is no longer confined to corporate compliance systems alone; leadership accountability is now part of the enforcement picture.
February system failure intensified scrutiny
A technical incident in February 2026 added urgency to the case. Bithumb mistakenly distributed billions of dollars worth of Bitcoin to users because of a system malfunction. It is still unclear whether the FIU investigation had already started before the event or picked up speed afterward. Even so, the sequence of a major operational error followed by a suspension notice has damaged the exchange’s standing.
Fine not finalized, estimate exceeds $25 million
The financial penalty has not been finalized. Industry insiders cited in the report estimate that it could exceed $25 million. If the final number comes in near that level, it would be close to a recent record-setting fine imposed on Upbit, the country’s largest crypto exchange. Comparable action against the biggest trading venues suggests regulators are applying enforcement pressure across the sector, not treating major platforms as exceptions.
March sanctions meeting expected to define next steps
Details of both the suspension and the monetary penalty are expected to become clearer at a March sanctions committee meeting. Bithumb described the current stage as a preliminary notification phase and said it plans to present ongoing compliance improvements during the final review. The exchange also stated that it intends to proactively demonstrate stronger internal controls while maintaining steady service for customers.
An advance warning does not always turn into immediate full-scale enforcement. Still, it keeps exchanges under constant compliance pressure. The outcome in Bithumb’s case may affect not only its own operations, but also other digital asset platforms working under South Korea’s stricter regulatory regime.