Bithumb Receives Business Suspension Notice for AML Violations

Bithumb, South Korea’s second-largest cryptocurrency exchange by trading volume, is reportedly facing a possible partial business suspension of up to six months as regulators step up enforcement over anti-money laundering controls.

South Korea’s Financial Intelligence Unit (FIU) gave Bithumb a preliminary notice of a six-month partial suspension over alleged anti-money laundering and know-your-customer failures under the Act on Reporting and Using Specified Financial Transaction Information, according to local media reports on Monday. The regulator reportedly cited concerns over dealings with unregistered overseas virtual asset service providers and shortcomings in customer due diligence.

The FIU also issued a reprimand warning to Bithumb’s CEO, a warning considered a heavy penalty, which may lead to restrictions on his reappointment or future roles. Regulators are expected to hold a sanctions review later in March before deciding on any final measures. Bithumb told News1 that the action remains at the pre-notification stage and that the scope of any sanctions could still change.

“This measure is not yet a confirmed sanction, but is a pre-notification stage, and there may be some adjustments in the sanctions trial,” a Bithumb spokesperson said, adding that “restrictions only apply to the transfer (withdrawal) of virtual assets by new members.”

If finalized, the suspension would restrict new users from transferring digital assets off the platform, according to the report. Bithumb did not immediately respond to Cointelegraph’s request for comment.

Related: South Korea moves to cap crypto exchange shareholder stakes at 20%: Report

The notice follows scrutiny on South Korea’s Financial Services Commission’s failure to detect critical flaws tied to Bithumb’s internal systems after the exchange mistakenly credited 2,000 Bitcoin (BTC) per user instead of 2,000 Korean won ($1.40) during a promotional event on Feb. 6, distributing a total of 620,000 BTC (worth around $43 billion at the time).

Related: Hacker returns $21M in Bitcoin stolen from South Korean authorities: Report

South Korean regulators impose stricter money laundering regulations

South Korean regulators are seeking to impose stricter sanctions on crypto exchanges suspected of AML and KYC violations. 

In November 2025, FIU imposed a partial three-month suspension and a 35.2 billion won ($25 million) fine on cryptocurrency exchange Upbit’s parent company, Dunamu, for similar violations. 

Crypto exchange Korbit also received a warning and a 2.73 billion won ($1.9 million) fine in December 2025.

Both administrative penalties stemmed from concerns related to dealings with overseas crypto service providers and neglect of customer verification practices.