On Thursday, a Seoul court issued an emergency injunction blocking the enforcement of a six-month partial business suspension against Bithumb, as reported by local media outlets. This move prevents restrictions that would have significantly impacted the cryptocurrency exchange’s main operations.
In March, South Korea’s Financial Intelligence Unit (FIU) had imposed sanctions on Bithumb following allegations of 6.65 million anti-money laundering rule violations. Specifically, the FIU noted 3.55 million instances where customer identities were not verified and 3.04 million failures in blocking prohibited transactions.
The sanctions, which included a $24.6 million (36.8 billion won) fine and disciplinary measures against CEO Lee Jae-won, were deemed the harshest penalties ever applied to a Korean won-based exchange. Judge Gong Hyeon-jin’s ruling on Thursday highlighted the detrimental business effects of limiting Bithumb’s operations. The court pointed out that while trading within the platform and Korean won conversions are feasible, inter-exchange transactions and external virtual asset transfers are essential functions.
The injunction also considered forthcoming regulatory changes affecting Bithumb’s competitive standing, noting that listed corporations and registered professional investment firms will soon be allowed to enter the virtual asset market. The court expressed concern that continued sanctions would hinder Bithumb’s ability to attract new clients.
Bithumb declared its intention to diligently present its case throughout ongoing legal proceedings. Initially, on March 23, the exchange sought termination of both the suspension and fine, which were scheduled to commence on March 27.
Established in 2014, Bithumb stands as one of South Korea’s largest cryptocurrency exchanges and operates under FIU oversight within the Financial Services Commission’s anti-money laundering framework. This legal reprieve occurs amid heightened regulatory scrutiny following an incident in February when the platform erroneously credited users with 2,000 BTC instead of 2,000 won during a promotion.
The error led to South Korean lawmakers criticizing regulators for overlooking structural issues contributing to Bithumb’s accounting mistake. Subsequently, Bithumb filed to confiscate Bitcoin from those who declined to return improperly allocated funds. In addition, authorities have suspended crypto lending services across the industry due to leverage concerns.