South Korea Fines Bithumb $24.6M Over AML Violations

Background on South Korea crypto regulations and Bithumb

South Korea has one of the most tightly regulated cryptocurrency markets globally. Authorities introduced strict compliance measures following concerns around speculation and illicit financial activity.

Regulations require exchanges to implement real-name verification systems and partner with domestic banks for account services. Additional rules under the Travel Rule mandate sharing transaction data for higher-value transfers.

The Virtual Asset User Protection Act, which took effect in 2024, further strengthened oversight by introducing stricter requirements for asset protection, reporting, and anti-money laundering procedures. Bithumb, one of the country’s largest exchanges, has operated within this regulatory framework since its early years but has faced periodic scrutiny.

South Korea fines Bithumb over AML violations

The decision that South Korea fines Bithumb follows findings of approximately 6.65 million compliance violations.

Regulators reported around 3.55 million cases where proper customer identity verification procedures were not followed. In addition, about 3.04 million transactions were not blocked despite regulatory requirements.

Authorities also identified tens of thousands of transactions involving unregistered overseas virtual asset service providers. These findings formed the basis for one of the largest enforcement actions against a crypto exchange in the country.

Details of penalties and suspension

As South Korea fines Bithumb, regulators imposed a financial penalty of ₩36.8 billion, equivalent to approximately $24.6 million.

The exchange also faces a six-month partial suspension that restricts services for newly registered users. Existing users will continue to have access to trading and account functions.

In addition to the corporate penalties, Bithumb’s chief executive received a formal reprimand, while its compliance reporting officer was suspended for six months. The exchange has been given a limited window to submit its response before the penalties are fully enforced.

Previous incidents and compliance concerns

The decision that South Korea fines Bithumb comes shortly after a separate incident involving a system error at the exchange.

In early 2026, a technical glitch temporarily credited users with incorrect Bitcoin balances during a promotional campaign. The issue disrupted local market pricing before being resolved.

While unrelated to the AML violations, the incident added to concerns about operational reliability and internal controls at the platform.

The enforcement action also follows similar penalties issued to other exchanges in the country, indicating a broader regulatory push.