South Korea Fines Crypto Exchange Bithumb $136,000 Over Overseas Data Transfers

South Korea’s Financial Intelligence Unit regulates crypto exchanges under the Act on Reporting and Using Specified Financial Transaction Information, requiring them to comply with know-your-customer and anti-money laundering rules. Bithumb was implicated in 6.65 million KYC violations and transactions with unregistered overseas operators, making the case a significant part of South Korea’s tighter oversight of its five largest domestic exchanges.

The FIU issued its final ruling in 2025, imposing a 36.8 billion won fine, equivalent to about $24 million, and a six-month partial business suspension that restricted virtual-asset withdrawals by new members. Trading by existing users was not immediately affected. A South Korean court subsequently stayed the suspension in July 2025, citing precedent from the Dunamu case, pending the outcome of administrative litigation.

Bithumb, South Korea’s second-largest cryptocurrency exchange, planned to distribute a combined 620,000 won to 249 winners in a promotion on Feb. 6, 2026. An employee mistakenly entered BTC instead of KRW as the currency, crediting accounts with 620,000 Bitcoin worth more than $40 billion on paper. The incident highlighted risks involving centralized exchanges’ internal ledgers, asset reserves and controls over manual processes.

Bithumb recovered 99.7% of the mistakenly credited assets that day and used company reserves to cover the 1,788 BTC that had already been sold. After pursuing recipients individually, it reduced the outstanding amount from about 12.3 billion won ($8.3 million) to 7 Bitcoin. On April 9, 2026, the company confirmed that it had petitioned a South Korean court for a provisional asset freeze against those refusing to return the funds, with civil lawsuits expected to follow.