Korean Court Blocks FIU Suspension of Bithumb

Seoul Administrative Court’s 2nd Division granted Bithumb an injunction that pauses a six-month partial suspension ordered by South Korea’s Financial Intelligence Unit, allowing the exchange to continue normal operations while legal and regulatory proceedings continue.

The FIU, the anti-money-laundering unit under the Financial Services Commission, imposed the suspension and a 36.8 billion won ($24.6 million) fine in March after finding about 6.65 million breaches of the Specific Financial Information Act. Investigators found that Bithumb failed to verify customer identities properly and did not block transactions involving unregistered overseas crypto operators. The suspension was scheduled to start on March 27; Bithumb filed for an injunction on March 23.

The court’s injunction applies only to the suspension order; the administrative determination and the fine remain under review and subject to ongoing procedures and potential appeals.

With the injunction in place, Bithumb may onboard new customers and process asset transfers while the broader dispute moves through the legal system.

Separately, the Personal Information Protection Commission opened an investigation into Bithumb, Upbit and other exchanges over alleged sharing of order book data with overseas trading venues. That inquiry is separate from the FIU’s AML action and could prompt additional regulatory measures depending on its findings.

Bithumb is also addressing the fallout from a February operational error in which an employee accidentally paid out 620,000 bitcoin instead of 620,000 won during a promotional event. The Financial Services Commission’s inspection identified weaknesses in internal controls and led to new rules for major exchanges.

Under the tightened requirements, major platforms must reconcile internal ledgers with actual crypto holdings every five minutes instead of once every 24 hours; automatic trading halts must trigger on large mismatches; audits will occur monthly rather than quarterly; manual payouts require third-party verification; and exchanges must appoint a Risk Management Officer and form a Risk Management Committee.

Courts are continuing to hear challenges by other exchanges against FIU sanctions. The FIU has appealed a court cancellation of sanctions against another operator, and at least one exchange has challenged sanctions in court.

For now, Bithumb’s operations remain active while multiple investigations, administrative reviews and potential appeals proceed.