The financial authorities have imposed severe penalties, including a six-month partial suspension of business operations and a 36.8 billion won fine, on the cryptocurrency exchange Bithumb for violating anti-money laundering obligations.
On the 16th, the Financial Intelligence Unit (FIU) of the Financial Services Commission held a sanctions review committee meeting and made this decision.
Bithumb supported 45,772 cryptocurrency transfer transactions with 18 foreign unregistered cryptocurrency business operators which failed to fulfill reporting obligations.
The FIU pointed out that despite continuous requests to halt transactions and the necessity of legal compliance, Bithumb failed to take effective blocking measures, reflecting a lack of commitment to compliance.
Moreover, approximately 6.59 million cases of violations regarding customer identification and transaction restriction obligations were confirmed.
Specific issues included completing customer verification using real-name certification documents or photocopies and image files where identity verification was impossible, missing detailed addresses, non-compliance with deadlines for re-verifying customers, and permitting transactions without additional checks for high-risk customers.
Especially, there were 3.04 million instances where transactions were not restricted for customers whose identities were not verified.
Additionally, 16,000 cases were identified where Bithumb violated data retention obligations by failing to keep copies of real-name identification documents received from customers.
Accordingly, the FIU decided to impose a six-month partial business suspension on Bithumb starting from the 27th, alongside the 36.8 billion won fine.
During the partial suspension period, existing customers can trade without restriction, but new customers will face temporary restrictions on external transfers of cryptocurrencies.
Sanctions were also decided on executives. The CEO received a “reprimand warning,” while the person responsible for reporting received a “six-month suspension.”
The FIU explained, “This sanction strictly holds responsibility due to the growing concern of user harm stemming from non-compliance with basic anti-money laundering obligations despite the growth in the cryptocurrency market.”
Meanwhile, Bithumb stated, “We respect the decision of the financial authorities’ sanctions and will strive to improve the pointed-out areas to create a safe trading environment and protect users.”