Seoul Court Blocks Bithumb's Six-Month Business Suspension

A Seoul Administrative Court granted Bithumb an emergency injunction Thursday, blocking enforcement of a six-month partial business suspension imposed by South Korea’s Financial Intelligence Unit, according to local media reports. Judge Gong Hyeon-jin cited potential irreparable harm to the cryptocurrency exchange’s core operations if the suspension remained in effect. The decision came as Bithumb faces intensifying regulatory scrutiny following multiple compliance violations.

Regulatory Violations and Penalties

South Korea’s Financial Intelligence Unit imposed the sanctions in March after alleging 6.65 million violations of local anti-money laundering rules. The FIU cited 3.55 million failures to verify customer identities and 3.04 million cases where Bithumb failed to block restricted transactions, according to the filing.

Alongside the suspension—described as the most severe penalty ever imposed on a Korean won-based exchange—regulators levied a $24.6 million (36.8 billion won) fine. CEO Lee Jae-won also faced disciplinary action as part of the sanctions.

Court’s Reasoning

Judge Gong Hyeon-jin’s ruling emphasized the business impact of restricting Bithumb’s core operations. “While trading within the exchange and Korean won conversions remain possible, inter-exchange transactions and external virtual asset transfers are also core functions,” the court stated. The judge added that “restrictions on these alone are expected to cause difficulties in attracting new customers.”

The court also considered upcoming regulatory changes that could affect Bithumb’s competitive position. The judge noted that “listed corporations and registered professional investment corporations” will be able to participate in the virtual asset market “soon.” The court concluded that if sanctions were to remain in effect, “it will inevitably have a negative impact on Bithumb’s ability to secure these new clients.”

Company Response and Background

Bithumb said it plans to “faithfully present” its position throughout the remaining legal proceedings. The exchange had requested the court end both the suspension and fine on March 23, just days before the penalties were set to take effect on March 27.

Founded in 2014, Bithumb ranks among South Korea’s largest cryptocurrency exchanges. The platform has operated under the oversight of the Financial Intelligence Unit, the anti-money laundering body under South Korea’s Financial Services Commission.

Recent Compliance Issues

Bithumb’s court victory comes amid ongoing regulatory scrutiny. In February, the exchange mistakenly credited hundreds of users with 2,000 BTC instead of 2,000 won in a promotion—a $43 billion accounting error. Following the incident, South Korean lawmakers criticized regulators over missing the structural issues that led to the error. Bithumb later filed to seize Bitcoin from users who refused to return the mistakenly credited funds.

Separately, South Korean authorities have halted crypto lending services industry-wide, citing leverage concerns.