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Photo courtesy of Yonhap News |
[Alpha Biz= Kim Jisun] South Korean cryptocurrency exchange Bithumb has been preliminarily notified of tougher sanctions than rival Upbit over alleged violations of the Act on Reporting and Use of Certain Financial Transaction Information, industry sources said.
According to the crypto industry on March 11, the Financial Intelligence Unit (FIU) under the Financial Services Commission notified Bithumb of proposed penalties including a six-month partial suspension of operations and a reprimand warning for its CEO over failures in anti–money laundering (AML) compliance.
The sanctions are stronger than those imposed on Upbit, which previously received a three-month business suspension for similar violations.
Regulators cited virtual asset transfers involving unregistered overseas exchanges, which are strictly prohibited under the law. Authorities say Bithumb failed to properly block such transactions and allowed large-scale transfers.
Industry observers believe the number of violations attributed to Bithumb significantly exceeds Upbit’s case, where 44,948 transfers with unregistered exchanges led to a three-month suspension and management reprimand.
Additional controversy has also raised concerns. Authorities are reviewing Bithumb’s order book sharing arrangement with Australian exchange Stella, whose parent company BingX is classified as an unregistered operator in Korea, potentially making the system linkage a regulatory violation.
The case could lead to record-level fines, possibly exceeding the 35.2 billion won penalty imposed on Upbit for violations including failures in customer verification and suspicious transaction reporting.
The sanctions may also affect Bithumb’s upcoming virtual asset service provider (VASP) license renewal review.
Separately, regulators are also investigating a recent bitcoin mispayment incident involving about 62 trillion won, which could result in additional penalties depending on the outcome of regulatory inspections.
Alphabiz Reporter Kim Jisun(stockmk2020@alphabiz.co.kr)
