Key Highlights
- Bithumb may face six-month partial suspension for violating AML regulations, with the CEO also facing disciplinary action.
- Current users remain unaffected, while new member withdrawals face restrictions only.
- South Korea caps major shareholder stakes at 20% and limits stablecoin corporate investments.
South Korea’s top crypto exchange, Bithumb, faces a potential six-month partial suspension after violating anti-money laundering (AML) regulations. The Financial Intelligence Unit (FIU) of the Financial Services Commission (FSC) issued an advance notice of sanctions, citing Bithumb’s dealings with unreported overseas virtual asset operators and insufficient customer due diligence.
As per a local report, the notice also mentioned disciplinary action against Bithumb’s CEO. Industry sources confirmed that the FIU plans to hold a sanctions review committee this month to decide the final penalties.
A Bithumb official stressed, “This measure is not a final sanction, but rather a preliminary notice, and there may be some adjustments during the sanctions review.” For now, existing users can keep making deposits, withdrawals, and trading virtual assets as usual, while the restrictions only affect new members’ withdrawals.
Impact mirrors previous regulatory actions
Bithumb’s situation follows a similar case last year when Dunamu, the company behind Upbit, got a three-month suspension and a 35.2 billion won fine for comparable mistakes. Korbit also faced fines and official warnings earlier this year. Consequently, the FIU seems to be stepping up oversight to make sure exchanges follow the Specific Financial Information Act.
As the Bithumb official explained, “The restriction only applies to new members’ virtual asset transfers (withdrawals),” showing that current users won’t face major disruptions. Moreover, Coinone and GOPAX are expected to go through similar reviews soon.
Broader regulatory context and corporate rules
Looking beyond Bithumb’s immediate sanctions, South Korea is overhauling its digital asset sector. The Democratic Party’s Digital Asset Task Force and the FSC recently agreed to cap major shareholders’ stakes at 20%, aiming to prevent concentrated ownership. Authorities can still allow exceptions up to 34%, giving them flexibility without weakening the reforms.
Additionally, the FSC plans to block stablecoins from corporate investments, which would limit USDT and USDC use for listed companies and professional investment firms. Officials say this move helps prevent risky investments and follows the Foreign Exchange Transactions Act, which doesn’t recognize stablecoins as legal foreign payment methods. However, a partial amendment that would recognize stablecoins as a payment method is still under review.
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