South Korea Fines Bithumb $24.6M And Imposes Six-Month User Registration Ban Over AML Failures

South Korean regulators have taken strong action against one of the country’s largest cryptocurrency exchanges after uncovering millions of compliance failures tied to anti-money laundering rules.

Authorities have fined Bithumb 36.8 billion won (about $24.6 million) and imposed a six-month partial suspension following an investigation that revealed widespread violations of financial monitoring requirements.

The penalty comes after the country’s financial watchdog, the Financial Intelligence Unit (FIU), completed a detailed inspection of several major digital asset platforms. Investigators found that Bithumb repeatedly failed to carry out proper identity checks and allowed transactions to proceed even when they should have been blocked under existing anti-money laundering standards.

While the exchange will continue serving its current users, regulators have temporarily blocked it from onboarding new customers as part of the disciplinary measures.

Investigation Reveals Millions Of Compliance Failures

The FIU’s investigation uncovered about 6.65 million violations linked to anti-money laundering (AML) rules on Bithumb’s platform. The scale of the breaches quickly raised concerns among regulators, who said the exchange failed to meet fundamental compliance obligations required of financial institutions.

According to the findings, a large portion of these cases involved the exchange’s failure to properly carry out Know Your Customer (KYC) checks. KYC procedures are designed to verify the identity of users before they are allowed to trade or move funds on an exchange.

Regulators say Bithumb failed to properly conduct identity verification in around 3.55 million cases. In these instances, users were able to access trading services even though the exchange had not completed the necessary verification processes required under South Korean financial regulations.

KYC requirements play a crucial role in preventing financial crimes such as fraud, money laundering, and illegal fund transfers. When these checks are not properly enforced, authorities say it becomes far more difficult to track suspicious financial activity.

Over Three Million Transactions That Should Have Been Blocked

The investigation also revealed serious problems in the exchange’s transaction monitoring systems. Regulators identified about 3.04 million cases where transactions that should have been blocked were allowed to go through.

Financial institutions are expected to monitor user activity and stop transfers that appear suspicious or violate compliance rules. These safeguards are meant to prevent illegal funds from moving through regulated financial platforms.

However, the FIU said Bithumb’s internal monitoring systems failed to properly enforce these restrictions in millions of cases.

Such gaps in oversight raise concerns about how effectively the exchange can detect unusual activity on its platform. Regulators warn that weak monitoring systems can create opportunities for illicit actors to exploit crypto platforms if the controls are not tightened.

$24.6 Million Fine And Six-Month Operational Restrictions

Following the findings, the FIU imposed a 36.8 billion won penalty, equivalent to roughly $24.6 million, on Bithumb.

In addition to the financial penalty, regulators ordered a partial suspension of the exchange’s operations for six months. The restriction focuses specifically on new user registrations, meaning the platform will not be allowed to onboard new customers during the suspension period.

Importantly, existing users will not be affected by the restriction. Customers who already have accounts on the exchange will still be able to trade digital assets, deposit funds, and withdraw their holdings as usual.

By limiting the suspension to new accounts, regulators appear to be trying to strike a balance between enforcing compliance and preventing unnecessary disruption for traders who already use the platform.

Still, the decision sends a clear signal that authorities are prepared to impose serious consequences when exchanges fail to meet regulatory standards.

Company Executives Also Face Disciplinary Measures

The enforcement action did not stop at corporate penalties. Regulators also issued disciplinary actions against senior officials at the exchange.

As part of the ruling:

•  Bithumb’s CEO received a formal warning from regulators.
•  The exchange’s compliance reporting officer was suspended from duty for six months.

These individual penalties reflect a growing trend among regulators to hold company leadership accountable for compliance failures.

Authorities increasingly believe that strong oversight from senior management is essential for maintaining proper compliance systems inside financial institutions, including crypto platforms.

By targeting both the company and its executives, regulators hope to push firms to strengthen their internal monitoring systems and ensure similar failures do not occur in the future.

Broader Industry Inspection Across South Korea’s Major Exchanges

The violations were uncovered as part of a broader regulatory inspection carried out between 2024 and 2025. During this period, authorities reviewed compliance systems at several major digital asset trading platforms operating in the country.

The exchanges examined during the investigation included:

•  Upbit
•  Bithumb
•  Coinone
•  Korbit
•  Gopax

Regulators focused on how these platforms implement anti-money laundering safeguards, verify user identities, and monitor financial activity.

South Korea has developed one of the most tightly regulated crypto markets in Asia. Exchanges operating in the country must comply with strict requirements, including verified banking partnerships, robust identity checks, and detailed reporting obligations for suspicious transactions.

Growing Pressure On Crypto Exchanges To Strengthen Compliance

The action against Bithumb highlights the increasing regulatory pressure facing cryptocurrency exchanges as governments work to tighten oversight of the digital asset sector.

As crypto markets continue to expand, regulators are paying closer attention to how exchanges handle financial compliance and whether they have adequate safeguards in place to prevent illegal activity.

For Bithumb, the latest penalty represents a significant regulatory setback. Although the exchange will continue serving its existing customers, the suspension on new registrations could slow its growth while it works to address the issues identified by authorities.

More broadly, the case serves as a reminder to the crypto industry that compliance is becoming just as important as innovation. Exchanges that fail to meet regulatory standards risk facing heavy fines, operational restrictions, or further disciplinary action.

Disclosure: This is not trading or investment advice. Always do your research before buying any cryptocurrency or investing in any services.

Follow us on Twitter @nulltxnews to stay updated with the latest Crypto, NFT, AI, Cybersecurity, Distributed Computing, and Metaverse news!