Financial Authorities Issue Prior Notice to Bithumb of Six-Month Partial Business Suspension for Violating the Act on Reporting and Use of Certain Financial Transaction Information

The virtual asset exchange Bithumb has received prior notification of a severe sanction from financial authorities for violations such as non-compliance with anti-money laundering obligations.

View of Bithumb Lounge in Gangnam-gu, Seoul. Photo by Yonhap News Agency

According to the financial sector and other sources on March 9, the Financial Intelligence Unit (FIU) under the Financial Services Commission issued a pre-notification to Bithumb last month regarding sanctions for violating the Act on Reporting and Use of Certain Financial Transaction Information. The sanctions include a partial business suspension for six months and a reprimand for the CEO.

The action was taken due to Bithumb's continued transactions with overseas virtual asset service providers that are not properly registered, as well as neglecting customer verification obligations.

For similar violations, the FIU imposed a three-month partial business suspension and a fine of 35.2 billion won on Dunamu (which operates Upbit), and a fine of 2.73 billion won and an institutional warning on Korbit. Sanction procedures are also currently underway for GOPAX and Coinone.

Prior notification is not a finalized measure but an administrative procedure to collect opinions in advance. Bithumb plans to explain shortcomings and improvements through formal procedures going forward.

The FIU is expected to convene the relevant sanctions review committee as early as this month.

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