South Korea’s consumer watchdog probes Bithumb over ‘false advertising’ suspicions

The South Korean crypto exchange Bithumb could face sanctions from the country’s antitrust and consumer protection watchdog over its advertising and marketing claims.

The Fair Trade Commission sent two investigators to Bithumb’s headquarters in the Gangnam District of Seoul to conduct a probe on February 4, the South Korean news agency Yonhap’s EInfoMax service reported.

The commission is reportedly investigating claims made in Bithumb’s marketing materials in March and April 2025 that Bithumb has “the highest level of liquidity in the domestic crypto exchange sector.”

Competition among South Korea’s biggest crypto exchanges is becoming increasingly intense as Bithumb and its closest rival Upbit prepare for a big year ahead.

Bithumb is aiming to become the first South Korean exchange to go public in New York this year, while Upbit is looking to complete a merger with the domestic tech giant Naver.

Race for dominance

Given the current market picture, the commission considers Bithumb’s liquidity claims to be potentially exaggerated and misleading, South Korean newspaper Chosun Ilbo wrote.

Data from CoinGecko shows that last year, Upbit dominated the Korean won trading market, cornering 68% of the market, South Korean broadcaster KBS reported. Bithumb’s share was 28%.

The commission has the power to charge firms with violating the Fair Labelling and Advertising Act if it discovers evidence of “false or exaggerated labeling or advertising.”

The law states that firms that “mislead consumers about a product or service” can be punished with fines and other disciplinary measures.

Sources at the aforementioned media outlets said the Fair Trade Commission is also considering launching an investigation into allegations that Bithumb unfairly wooed customers with a cash giveaway in 2025.

Failed cash handouts

Late last year, Bithumb ran a promotion offering new customers around $70 if they started using its application programming interface, or API.

An API is a type of software interface. In Bithumb’s case, this allows web users to access the exchange’s platform without using its app or website.

The commission reportedly suspects Bithumb of changing the offer’s conditions midway through the promotional event.

After more than 50,000 participants signed up for the event, Bithumb reportedly changed the eligibility rules.

As a result, approximately 30,000 participants reportedly failed to receive cash handouts.

DL News has requested comment from Bithumb regarding these reports.

Tim Alper is a News Correspondent at DL News. Got a tip? Email him at tdalper@dlnews.com.