South Korean regulators imposed a major fine on Bithumb, the country’s second largest cryptocurrency exchange, after identifying large scale anti money laundering violations. Authorities said the exchange failed to follow required customer verification rules and allowed transactions without proper identity checks.
The country’s Financial Intelligence Unit announced a 36.8 billion won fine, roughly $24 million, against Bithumb. Regulators also ordered a six month partial suspension of business operations connected to certain customer related services.
The penalty follows a regulatory investigation into compliance procedures at the exchange. Officials said the violations involved failures to properly verify customer identities and monitor transactions, which are core requirements under South Korea’s digital asset regulations.
Regulators Cite Millions of Verification Failures
Authorities said the investigation uncovered about 6.59 million cases where identity verification procedures were incomplete or missing. These lapses violated South Korea’s strict anti money laundering and know your customer rules for crypto exchanges.
Because of the violations, regulators ordered Bithumb to halt some services involving new customer accounts during the six month suspension period. However, existing users can still access trading services. The order therefore limits part of the exchange’s operations rather than shutting down the platform entirely.
The action highlights increasing regulatory pressure on crypto exchanges in South Korea. Authorities have strengthened oversight since 2021, requiring exchanges to maintain strict reporting, customer verification, and financial monitoring systems. As a result, regulators continue to investigate compliance practices across the industry.
Bithumb Faces Growing Regulatory Scrutiny
The penalty also follows earlier operational problems that raised concerns among regulators. In February, Bithumb reported a system error during a promotional event that mistakenly distributed a large number of bitcoin rewards to users.
The error triggered abnormal trading activity on the platform and briefly pushed bitcoin prices on the exchange lower. Regulators later examined the incident as part of a broader review of the exchange’s internal control systems.
Together, the fine and the partial suspension reflect the government’s effort to tighten oversight of digital asset platforms. South Korea remains one of the world’s most active cryptocurrency markets, and regulators continue to push exchanges to meet stricter compliance and operational standards.
Source: https://coinpaper.com/15470/bithumb-hit-with-24-m-fine-as-korea-cracks-down-on-aml
