Key Insights:
- Bithumb faces a six-month partial suspension notice over alleged AML and KYC violations.
- Proposed sanctions would restrict crypto withdrawals mainly for new Bithumb users.
- South Korean regulators continue tightening AML enforcement across major crypto exchanges.
South Korea’s cryptocurrency exchange Bithumb has received a preliminary notice of a six-month partial business suspension from financial authorities. The Financial Intelligence Unit (FIU), which operates under the Financial Services Commission, issued the notice after identifying alleged violations of anti-money laundering (AML) obligations and customer verification rules.
According to the report, the FIU informed Bithumb of possible sanctions related to its handling of transactions involving overseas virtual asset operators and deficiencies in customer due diligence procedures. The regulator also notified the exchange that its chief executive officer may face disciplinary action as part of the enforcement process.
Bithumb Sanctions Target New Users’ Crypto Transfers
The FIU stated that the Bithumb crypto exchange may face a six-month partial suspension of business operations for violating provisions under the Special Financial Transactions Act. Regulators raised concerns about the exchange’s reported dealings with unreported overseas virtual asset operators.
Authorities also cited failures related to Know Your Customer (KYC) procedures. These requirements form a key component of South Korea’s anti-money laundering framework for digital asset platforms.
If implemented, the sanction would not halt all activity on the exchange. Instead, the restriction would mainly target crypto transfers conducted by newly registered users.
Under the proposed measure, new members would face restrictions on withdrawals of virtual assets. However, existing users would continue to deposit and withdraw Korean won and trade digital assets normally.
A Bithumb official confirmed that the action remains under review. The representative stated that the notification represents a preliminary measure rather than a finalized penalty.
The official also explained that regulators could adjust the sanctions during the review process. According to the exchange, the proposed restriction currently focuses only on new users’ virtual asset transfers.
Regulatory Review Will Determine Final Bithumb Sanctions
South Korean financial authorities plan to convene a sanctions review committee later this month. The committee will examine the case and determine the final level of disciplinary action against Bithumb.
The FIU issued the advance notice as part of the formal enforcement procedure used for financial institutions and digital asset exchanges. This process allows the targeted firm to respond before authorities finalize penalties.
At the same time, regulators are still analyzing compliance practices on a number of domestic exchanges. Authorities anticipate sanctions reviews for Coinone and GOPAX after the Bithumb case.
The regulatory review is part of broader efforts by South Korean authorities to address compliance risks in the digital asset sector. The FIU has recently taken action against multiple exchanges for AML and KYC violations.
Previous Sanctions Against Other South Korean Exchanges
Recent enforcement actions show a pattern of penalties against exchanges accused of similar violations. In November 2025, regulators sanctioned Dunamu, the parent company of the Upbit exchange.
The FIU placed Dunamu on a three-month partial suspension and issued a fine of 35.2 billion won, or about $25 million. Authorities cited similar AML compliance problems.
Earlier this year, regulators also penalized the cryptocurrency exchange Korbit. The FIU issued an institutional warning and fined 2.73 billion won, or about $1.9 million. Officials attributed these sanctions to concerns about transactions with overseas crypto service providers and customer verification practices.