South Korea has announced major anti-money laundering penalties on crypto exchange Bithumb as the country continues a crackdown on defaulters. Bithumb underwent its Financial Intelligence Unit (FIU) inspection in March 2025 and has now been found culpable by the authorities.
According to reports from local media, the crypto exchange has now been fined heavily for violating domestic regulations.
In its statement, the FIU claimed that it discovered several compliance failures at Bithumb, including cases where the exchange breached AML protocols, had inadequate know-your-customer (KYC) processes, and a lapse in suspicious transfer reporting.
The exchange could face significant penalties similar to those of Upbit and Korbit, depending on the type and amount of violations.
Bithumb set to face penalties for AML violations
The exact fine amount is still pending official announcement, but sources familiar with the happenings in the industry claim that the identification of systemic AML failures is similar to those at Upbit and Korbit.
The exchange could receive a substantial fine, with sources estimating that it could match or exceed the $25 million that the financial regulator levied on Upbit. This is due to its huge market share and the additional investigation into its order book.
Reports highlighted that the FIU has already finalized its audits and has proceeded to sanctions. The violations of Bithumb include failure to carry out due diligence on its customers, which includes incomplete verification of user identities, such as unclear pictures, improper address checks, and a lack of enhanced due diligence for high-risk customers. Upbit recorded 5.3 million such cases, while Korbit only saw 12,800 cases.
In addition, Bithumb also allowed trades to be carried out by unverified users, violating rules that prohibit services until full KYC is completed. The platform also failed to report suspicious transactions, delaying or omitting reports on unusual trade activities to authorities.
The FIU also claimed that Bithumb supported transactions carried out with unregistered local and international exchanges, increasing the rate of money laundering carried out across the border.
FIU vows to stabilize the market to ensure trust
Unlike Upbit and Korbit, Bithumb faced extra investigation into its order book management, which regulators alleged involved manipulative practices or insufficient monitoring, which could further amplify the seriousness of penalties on the exchange.
The FIU mentioned that the issues it listed came from repeated or structural weaknesses, rather than isolated errors. The increase in volume of violations shows a lack of internal control despite Bithumb’s market dominance.
The FIU mentioned that it will finalize details after Bithumb submits a response to its initial findings, with the process expected to conclude in the early part of 2026. This aligns with its methodical rollout, emphasizing deterrence over disruption.
Meanwhile, the FIU has intensified scrutiny of major exchanges to ensure they are complying with AML and KYC rules. The latest set of penalties targeted crypto exchanges identified as the “Big Five”, which include Upbit, Coinone, GOPAX, Bithumb, and Korbit.
The FIU said it plans to carry out follow-up measures for the other on-site inspections. The regulator also mentioned that it plans to impose sanctions on serious violations of special financial laws, noting that it will serve as a warning to other crypto firms. It has also made it known that it is not relenting in its efforts to improve the AML capabilities of crypto exchanges.
The FIU said the violations appear to be caused by the rapid growth outpacing the compliance infrastructure, noting that it will support the crypto industry to grow with public trust.
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Source: https://www.cryptopolitan.com/bithumb-faces-major-aml-penalties/
