Written by Ezra Reguerra, Staff Writer. Reviewed by Bryan O'Shea, Staff Editor. Bithumb wins temporary court stay on South Korea suspension: Report
A Seoul court reportedly paused Bithumb’s six-month partial business suspension, adding to legal challenges against South Korea’s crypto regulator.
A South Korean court has reportedly temporarily blocked a six-month partial business suspension order against crypto exchange Bithumb, allowing the company to continue offering certain services to new customers while its legal challenge against financial regulators proceeds.
The Seoul Administrative Court accepted Bithumb’s request to suspend enforcement of the penalty imposed by the Financial Intelligence Unit (FIU), according to Yonhap News Agency. The ruling pauses the effect of the suspension until the court issues a decision in the main case.
The court’s decision keeps one of South Korea’s largest crypto exchanges operating normally for now while adding to a broader legal challenge against the FIU’s enforcement actions on major domestic exchanges.
The Financial Intelligence Unit (FIU) imposed the sanction after an inspection found about 6.65 million alleged violations of the country's Financial Information Act, including failures tied to transactions with unregistered virtual asset service providers. The regulator ordered a six-month partial business suspension from March to September and said it would impose a $25 million administrative fine.
Bithumb filed an administrative lawsuit and requested a stay of enforcement on March 23, according to Yonhap. The suspension would have restricted new Bithumb customers from transferring virtual assets to and from external wallets and platforms, while existing customers would not have been restricted.
The court ruling follows earlier scrutiny of Bithumb’s internal controls. In February, South Korean authorities opened a probe into Bithumb after it mistakenly credited users with 620,000 Bitcoin during a promotional event, while lawmakers later criticized the FSC for failing to detect alleged system weaknesses despite prior inspections.
FIU sanctions face broader court challenges
The Bithumb ruling comes as other major South Korean crypto exchanges challenge FIU penalties tied to anti-money laundering compliance.
Upbit operator Dunamu recently won a first-instance administrative ruling on April 9 that canceled a three-month partial business suspension imposed by the FIU, with the court citing insufficient regulatory guidance.
Related: South Korean authorities under fire over $43B Bithumb Bitcoin error
On April 14, the FIU accused crypto exchange Coinone of failing to verify user identities in about 70,000 cases and imposed a $3.5 million fine and a three-month partial business suspension. Coinone has also challenged the sanctions, which led to the court halting the business suspension order, according to The Chosun Daily.
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