South Korean cryptocurrency exchange Bithumb has secured a significant legal victory as the Seoul Administrative Court's 2nd Administrative Division under Judge Gong Hyeon-jin approved a stay on Thursday, pausing enforcement of the six-month suspension imposed by the Financial Intelligence Unit. According to Yonhap News Agency, the court's decision allows the exchange to continue operating while the case proceeds, providing relief to the platform's operations in one of the world's most important cryptocurrency trading jurisdictions. The ruling represents a major development for the exchange's operations in the South Korean market, which has been one of the world's most significant cryptocurrency trading hubs. As reported by CryptoRank, this is one of the toughest penalties ever levied against a Korean won-based exchange, with the stay not canceling the sanction outright but only pausing enforcement until the main lawsuit is resolved.
The suspension had been imposed by South Korean regulators as part of broader enforcement actions targeting cryptocurrency exchanges operating in the country. As reported by The Korea Herald, the Financial Intelligence Unit imposed a 36.8 billion won fine (approximately $24.6 million) after identifying roughly 6.65 million cases where user identities were not properly verified. The penalty targeted new customers by restricting external crypto deposits and withdrawals, a move that would have limited onboarding activity if enforced. The suspension and fine were originally imposed in March by the Financial Intelligence Unit due to alleged violations of anti-money laundering rules, including millions of failures in customer identity verification and transaction blocking. According to AML Network, regulators accused Bithumb of supporting 45,772 virtual asset transfers with 18 unregistered overseas virtual asset service providers (VASPs), despite repeated requests from the FIU to cut off such flows. The partial business suspension was specifically designed to block new customers from depositing or withdrawing external virtual assets, effectively freezing Bithumb's growth even if existing users could still trade.
Regulatory scrutiny has intensified following a series of operational issues, including a February payout error that triggered investigations into internal controls. During a promotional campaign, the exchange mistakenly distributed a theoretical 620,000 BTC instead of 620,000 won, an error that led to unintended credits reaching external wallets. According to Chosun Biz, Bithumb recovered about 99.7% of the assets, while the remaining portion was addressed using company reserves after some users sold the funds. Legal action has since been initiated against certain users who refused to return the assets, with provisional seizure requests filed to freeze holdings ahead of civil proceedings. The case is being watched as a bellwether for how much power the FIU and Financial Services Commission will ultimately wield over registered exchanges, with similar audits reportedly underway at other major trading platforms.
The court's decision to pause the suspension is expected to have significant implications for Bithumb's operations in the South Korean market, which has been a key revenue source for the exchange. According to Yonhap News Agency, company statements indicated that the suspension could slow new user growth and weigh on business activity, while the FIU maintained that any revenue impact would be limited. However, it remains unclear if the $24.6 million fine is also suspended as part of the court's ruling, with payment of the fine remaining pending more than four weeks after the deadline despite a 20% early settlement discount offered by the regulator. For the wider market, the case is being watched as a potential test case for how far Korean regulators can go in policing crypto exchanges, with the outcome potentially emboldening other exchanges to challenge sanctions they view as disproportionate, reshaping the balance between enforcement and judicial oversight in one of Asia's most tightly regulated crypto markets.
