Bithumb Wins Court Battle Over South Korean Regulator Suspension

South Korea’s Seoul Administrative Court overturned a six-month partial business suspension imposed on Bithumb by the Financial Intelligence Unit (FIU), according to local reports by Yonhap News. The court’s ruling allows Bithumb to continue normal business operations while facing separate investigations into anti-money laundering failures and order book sharing practices.

Original Penalty and Violations

The FIU, the anti-money laundering body under the Financial Services Commission (FSC), imposed the six-month partial suspension and a $24.6 million (36.8 billion won) fine in March after discovering approximately 6.65 million violations of the Specific Financial Information Act. Investigators found that Bithumb failed to properly verify customer identities and did not block transactions with unregistered overseas crypto operators. The proposed suspension was scheduled to begin on March 27 and would have blocked new customers from transferring crypto assets in or out of the platform.

Bithumb filed an injunction on March 23, days before the suspension was set to take effect, freezing the suspension until after the court ruled. The Seoul Administrative Court’s 2nd Division accepted Bithumb’s request, allowing the exchange to continue operations without disruption while the broader legal dispute proceeds.

Regulatory Actions Across South Korea’s Crypto Sector

The Seoul Administrative Court also ruled in favor of Dunamu (NASDAQ: DUNU), the operator of Upbit, canceling a three-month partial suspension and a 35.2 billion won fine on similar charges. The court determined that Dunamu had taken reasonable compliance steps and that a small percentage of flagged transactions did not amount to intentional wrongdoing. The FIU has since appealed that decision, moving the case to a second trial. Coinone has also received sanctions and is challenging them in court.

South Korea’s Personal Information Protection Commission has opened a separate investigation into Upbit, Bithumb, and other platforms regarding the sharing of order books with overseas platforms.

Separate Investigation and Regulatory Tightening

Bithumb faces a separate and potentially more damaging investigation tied to a February incident in which a staff member accidentally paid out 620,000 Bitcoins instead of 620,000 won during a promotional event. The FSC found “deficiencies in Bithumb’s internal control system” during its inspection of the February incident.

The payout error prompted the FSC to tighten monitoring requirements for all major exchanges. Before the incident, three of South Korea’s five largest platforms reconciled their internal ledgers with actual crypto holdings only once every 24 hours; the FSC now requires those checks every five minutes, with automatic trading halts triggered by large mismatches. Monthly audits have replaced the previous quarterly schedule.

Additional requirements now in effect include third-party verification for all manual payouts, and exchanges must appoint a Risk Management Officer and form a Risk Management Committee.