Key Takeaways:
A Seoul court granted crypto exchange Bithumb an injunction against a six-month partial business suspension, pausing a major penalty from the country's financial regulator over 6.65 million alleged anti-money laundering (AML) violations.
"Restrictions on these alone are expected to cause difficulties in attracting new customers," Judge Gong Hyeon-jin of the Seoul Administrative Court said in the Thursday ruling, noting that inter-exchange transactions and external asset transfers are core functions for an exchange.
The Financial Intelligence Unit (FIU), South Korea's anti-money laundering body, imposed the suspension and a 36.8 billion won ($24.6 million) fine in March. The regulator's investigation alleged 3.55 million failures to verify customer identities and 3.04 million cases where Bithumb failed to block restricted transactions, including those with unregistered overseas virtual asset providers. The suspension, which would have barred Bithumb from offering key services to new users, was set to begin March 27.
The court's decision provides critical relief for Bithumb, one of South Korea's largest exchanges, as it navigates increasing regulatory pressure and prepares for new competition. The judge specifically noted that with "listed corporations and registered professional investment corporations” soon able to enter the virtual asset market, the suspension would "inevitably have a negative impact on Bithumb’s ability to secure these new clients." The stay remains in effect pending a final verdict on the case.
Bithumb's legal challenge is part of a broader trend of South Korean crypto exchanges pushing back against FIU sanctions. In a similar case, Upbit operator Dunamu won an administrative ruling in April that canceled its own partial business suspension, with the court citing a lack of clear regulatory guidance. The FIU has also penalized exchange Coinone, which is challenging the sanctions in court.
The ruling comes after a difficult period for Bithumb. In February, the exchange faced intense scrutiny after it mistakenly credited users with 620,000 Bitcoin instead of 620,000 won (about $43 billion at the time) in a promotional event. The incident prompted lawmakers to criticize regulators for failing to identify the exchange's internal control weaknesses. Bithumb is also reportedly part of a separate probe by the Personal Information Protection Commission into data sharing practices with overseas platforms.
Founded in 2014, Bithumb operates under the supervision of the Financial Intelligence Unit, which is part of the Financial Services Commission. The exchange said it plans to “faithfully present” its position during the ongoing legal proceedings.
This article is for informational purposes only and does not constitute investment advice.
