South Korean cryptocurrency exchange Bithumb is facing escalating regulatory pressure after receiving a record fine and partial business suspension, with additional sanctions looming over a recent bitcoin overpayment incident and past compliance issues.
The country’s Financial Intelligence Unit (FIU), under the Financial Services Commission, said on March 16 local time that it imposed a fine of approximately $27.6 million on Bithumb for violations of anti-money-laundering regulations. The penalty is the largest ever disclosed by the FIU, exceeding a prior $26.4 million fine imposed on rival exchange Upbit.
In addition to the fine, regulators ordered a six-month partial suspension of operations. The restriction applies to new users, who will be unable to transfer crypto assets to other exchanges during the period, though trading within the platform remains permitted. Existing users are not affected.
While executive-level penalties were relatively lighter than those imposed on Upbit, the scale of the fine and the longer suspension period signal a significantly tougher stance overall, industry observers say.
Further regulatory action may be forthcoming. The Financial Supervisory Service is currently reviewing a separate incident in which Bithumb mistakenly distributed bitcoin during a promotional event last month.
On February 6 local time, the exchange intended to issue rewards worth roughly $1.50 per user but instead credited users with 2,000 bitcoins each due to a system error. Authorities have since completed an on-site inspection and are expected to determine the level of sanctions after an internal review. The case falls under separate investor-protection rules and is independent of the FIU’s penalties.
Additional scrutiny could also arise from Bithumb’s past sharing of order book data with an overseas exchange, Stellar. The FIU previously launched an investigation into the matter, which is not included in the latest sanctions.
South Korean regulations allow limited order book sharing with foreign exchanges, but only under strict conditions, including prior disclosure of licensing credentials and customer verification procedures. Regulators determined that Bithumb’s compliance with these requirements was insufficient.
An FIU official confirmed that the latest penalties stem solely from violations identified during an inspection conducted in March of last year, indicating that further action related to the order book-sharing case remains possible.
Industry analysts say the combination of regulatory penalties, operational restrictions, and ongoing investigations has left Bithumb under significant pressure, raising concerns about its compliance systems and long-term competitiveness in an increasingly regulated market.
