[비즈한국] The legal battle between Bithumb, the nation's second-largest virtual asset exchange, and financial authorities has begun. Following an on-site inspection, the Financial Intelligence Unit (FIU) imposed heavy sanctions on Bithumb, including a six-month partial business suspension, a 36.8 billion KRW fine, and disciplinary action against its CEO. In response, Bithumb filed a lawsuit to cancel the business suspension order and requested a stay of execution. On the 23rd, the industry's eyes were fixed on the interrogation date for the stay of execution, which offered a glimpse into both sides' arguments ahead of the main trial.
On March 17, the FIU announced that an anti-money laundering on-site inspection conducted between March and April 2025 revealed approximately 6.65 million instances where Bithumb violated obligations between December 2021 and April 2025, including: the prohibition of transactions with unregistered virtual asset service providers, customer identification and transaction restriction obligations under the Act on Reporting and Using Specified Financial Transaction Information (Special Financial Transactions Act), and data retention obligations.
At a sanctions review committee meeting held on March 16, the FIU decided to impose a six-month partial business suspension, a 36.8 billion KRW fine, and personnel sanctions such as a warning for the CEO and a six-month suspension for the reporting officer for violations of the Special Financial Transactions Act. Partial business suspension restricts new customers from transferring virtual assets externally, though virtual asset trading, exchanges, and KRW deposits/withdrawals remain possible.
Consequently, Bithumb filed a lawsuit to cancel the suspension and requested a stay of execution to halt the effect of the suspension until the main trial concludes. However, the business suspension has been temporarily halted until April 30, as the court granted the stay of execution on March 24, the day after Bithumb filed the suit.
On April 23, the Seoul Administrative Court held the first interrogation date for the stay of execution. It was an opportunity to confirm the arguments of both sides prior to the main lawsuit. Bithumb and the FIU presented opposing views centered on whether the damage from the suspension is severe and whether the level of the sanction is legitimate.
Bithumb emphasized the severity of the damage caused by the business suspension. Bithumb argued, "Losing customer trust makes it difficult to conduct normal business. Negative perceptions in the market grow, leading to irreparable damage. Market share falls, and legal disputes with business partners could arise." They added, "If a six-month suspension is executed, there will be no practical benefit even if we pursue the main lawsuit."
Bithumb also argued that the suspension was unjust, claiming the authorities exercised arbitrary judgment in applying the Special Financial Transactions Act. They noted that they had made efforts to prevent crime, such as manually reviewing transactions with unregistered providers, which they claim authorities failed to consider. They also pointed out inequity, noting that for transactions under 1 million KRW, the sender and recipient are often the same person, lowering money laundering risks, and that while Dunamu received only a three-month suspension, Bithumb received the maximum six-month penalty.
Conversely, the FIU pointed out that the term "regulatory vacuum" is inappropriate, citing the intent of the Special Financial Transactions Act to prevent money laundering. The FIU side stated, "The Special Financial Transactions Act is meant to prevent criminal funds from being misused for drug trafficking, terrorism, etc., and it prohibits transactions with unregistered providers," emphasizing to the court, "Repeatedly using the term 'regulatory vacuum' goes against the purpose of the law. Please consider this in the main lawsuit as well."
Regarding the measures taken by Bithumb, the FIU responded, "Measures against transactions with unregistered providers may differ for each service provider," but added, "There is room for debate over whether the timing and content of Bithumb's response were sufficient." Furthermore, the FIU countered that the business suspension does not ban all transactions, so the severe damage Bithumb claims would not occur.
If Bithumb's stay of execution request is not granted, the six-month partial business suspension will be applied regardless of the main lawsuit. The date for the conclusion of the stay of execution hearing was set for April 29, the day before the temporary suspension of the business suspension expires.
Many in the industry believe Bithumb's stay of execution request will be granted. This is because Dunamu (the operator of Upbit) recently won a lawsuit to cancel a similar business suspension order against the FIU. In February 2025, Dunamu received a three-month partial business suspension, a warning for its CEO, and other sanctions due to transactions with unregistered virtual asset service providers. Since the violations cited by the FIU for Bithumb and Dunamu are similar, the grounds for Dunamu's victory are likely to work in Bithumb's favor.
The core issues in the Dunamu-FIU lawsuit were whether there was intentionality or gross negligence warranting a business suspension, and whether necessary measures were taken based on the findings. On April 9, the Seoul Administrative Court ruled that due to the lack of regulations for transactions under 1 million KRW, it is difficult to view transactions with unregistered providers under 1 million KRW occurring on Upbit as intentional or gross negligence.
The Special Financial Transactions Act implements the "Travel Rule," which mandates the recording and sharing of sender/recipient information for virtual asset transactions of 1 million KRW or more to prevent money laundering. Virtual asset exchanges have established their own verification systems for transactions under 1 million KRW to prevent illegal fund flows. In fact, the fact that Dunamu implemented verification procedures even for transactions under 1 million KRW worked to its advantage in court.
During the FIU investigation, Dunamu was implementing measures such as requesting and receiving letters of commitment from customers and blocking transactions if a wallet used for a virtual asset withdrawal was identified as an unregistered provider through a blockchain data solution company (Chainalysis). While the FIU argued in court that Dunamu's level of measures was inferior to other companies, the court prioritized the fact that Dunamu had prepared countermeasures, regardless of the sufficiency of those measures. This is the background for why Bithumb emphasized its efforts, such as establishing a monitoring system, during this interrogation.
Regarding this stay of execution request, Bithumb stated, "We will faithfully explain our position in the remaining legal proceedings."