South Korea’s financial watchdogs fined Bithumb 36.8 billion wonabout $24.5 millionand required a six-month partial shutdown due to serious Anti-Money Laundering (AML) rule breaches.
The penalties reflect the governments push to tighten control over crypto platforms. Regulators found around 6.65 million AML violations at the exchange, including problems in verifying customer identities, limiting transactions, and maintaining proper records.
Bithumb’s Overseas Transactions
The Financial Intelligence Unit (FIU) reported that thumb helped route 45,772 crypto transfers to 18 overseas virtual asset service providers that werent registered in South Korea.
That activity broke AML laws designed to stop illegal financial flows, especially those tied to fraud or criminal networks. This shows how hard it is for crypto exchanges to meet current legal standards without breaking rules. Bithumb’s repeated failures prove the need for stricter enforcement actions.
Also Read: South Korea Crypto Trading Jumps, XRP Dominates as 14 Altcoins Climb
Partial Cessation of Operations
The limited six-month ban imposed on Bithumb, starting March 27 and ending on Sept 26, will prevent the exchange from engaging in external crypto transfers for new customers.
While existing clients will have no limitations on the trade, new clients will still be able to buy or sell crypto and perform deposit or withdrawal of Korean won from the exchange.
The FIU issued multiple warnings to Bithumb to stop doing transactions with unregistered overseas crypto firms, but the lack of compliance by the exchange led to regulatory action.
Also Read: South Korea Introduces Tax Reform By Tracking Crypto Profits Ahead of 2027
Wider Regulatory Crackdown
This measure forms a part of the broader regulatory crackdown in South Korea on AML compliance in the crypto sector. The FIU has imposed sanctions on other exchanges like Upbit and Korbit as well for similar breaches.
Upbit was subjected to a penalty of 35.2 billion won ($23.5 million) and a three-month ban on crypto deposits and withdrawals for new customers in February 2025.
With the regulators enforcing more stringent controls, exchanges need to focus on strong compliance measures to prevent such penalties and continue to earn the trust of the market.
Also Read: Flow Takes Court Action against South Korea’s Top 3 Exchanges
