South Korea has announced significant anti-money laundering penalties against virtual currency exchange Bithumb as it continues to crack down on defaulters. Bithumb was examined by the Financial Intelligence Unit (FIU) in March 2025 and has now been found guilty by authorities.
According to local media reports, the cryptocurrency exchange has been slapped with a hefty fine for violating domestic regulations.
In a statement, the FIU claimed to have discovered several compliance violations at Bithumb, including AML protocol violations at Bithumb, inadequate know-your-customer (KYC) processes, and failure to report suspicious transfers.
Depending on the type and amount of violations, the exchange could face significant fines similar to Upbit and Korbit.
Bithumb will be penalized for AML violations
While the exact amount of the fine is still pending official announcement, sources familiar with industry events claim that the identification of systemic AML failures is similar to that of Upbit and Korbit.
The exchange could face a hefty fine, which officials estimate could match or exceed the $25 million that financial regulators imposed on Upbit. This is due to its huge market share and additional exploration of its order book.
Reports have revealed that the FIU has already completed its audit and is proceeding with sanctions. Bithumb's violations include failing to conduct due diligence on its customers, including incomplete user identification such as blurred photos, inadequate address checks, and a lack of increased due diligence on high-risk customers. Upbit has recorded 5.3 million such cases, while Korbit has only seen 12,800.
Additionally, Bithumb also allowed unverified users to perform transactions, violating regulations that prohibit the service until full KYC is completed. The platform also failed to report suspicious transactions and delayed or omitted reporting unusual trade activity to authorities.
The FIU also alleged that Bithumb facilitated transactions with unregistered domestic and international exchanges, increasing the rate of cross-border money laundering.
FIU vows to stabilize markets to ensure confidence
Unlike Upbit and Korbit, Bithumb faces additional scrutiny over its order book management, which regulators allege involves manipulative practices and insufficient oversight, potentially increasing the severity of penalties against the exchange.
The FIU said the problems listed did not result from isolated errors, but from repeated or structural weaknesses. The increasing number of violations indicates Bithumb's lack of internal controls despite its market dominance.
The FIU said it would finalize details after Bithumb submits a response to its initial findings, and said the process is expected to be completed in the first half of 2026. This is consistent with organizational developments that emphasize deterrence against disruption.
Meanwhile, the FIU is increasing its oversight of major exchanges' compliance with AML and KYC rules. The latest set of penalties targeted the so-called “big five” cryptocurrency exchanges, including Upbit, Coinone, GOPAX, Bithumb, and Korbit.
FIU said it will continue to take follow-up measures for other on-site inspections. The regulator also noted that it plans to impose sanctions for serious violations of special financial laws, noting that it will serve as a warning to other crypto companies. He also revealed that he is not enthusiastic about efforts to improve cryptocurrency exchanges' AML capabilities.
The FIU said the violations appear to be due to rapid growth outpacing compliance infrastructure, which will help the crypto industry gain public trust and grow.
