South Korea’s Second-Largest Cryptocurrency Exchange Faces Up to 6-Month Suspension! Here Are the Details

South Korea-based cryptocurrency exchange Bithumb could face serious sanctions from financial authorities.

According to information reported by local broadcaster Korean Broadcasting System (KBS), the stock exchange is expected to receive a partial suspension of operations for up to six months and a hefty fine for violating its anti-money laundering obligations. Disciplinary action against the company’s senior management is also reportedly under consideration.

According to the report, financial regulators cited shortcomings in customer identity verification processes as the primary reason for the penalty. The investigation focused on the insufficient implementation of Know Your Customer (KYC) procedures, which mandate cryptocurrency exchanges to identify their users.

It was also alleged that authorities had previously warned Bithumb of a potential fine of tens of billions of South Korean won for these violations.

The planned sanctions include a six-month partial suspension of operations. However, it is stated that this penalty will not completely halt all transactions of the exchange. In this context, some services, such as users withdrawing their crypto assets to external wallets, may be temporarily restricted.

Bithumb, in a statement regarding the matter, said it plans to explain its position in detail as the process continues. The company stated that it will present its defense in subsequent meetings with regulatory bodies and will take the necessary steps depending on the outcome of the process.

In South Korea, the cryptocurrency market has been under strict regulatory scrutiny in recent years. Authorities are particularly closely monitoring exchanges’ compliance processes to reduce the risk of money laundering. In this context, the sanctions against Bithumb are seen as an indication that regulatory pressure on the crypto sector in the country continues to increase.

*This is not investment advice.

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