Seoul Administrative Court Suspends Bithumb's Business Halt... South Korea's No. 2 Exchange Finds Breathing Room Amid Regulatory Risks

On April 30, 2026, the Seoul Administrative Court granted a stay of execution for the six-month business suspension imposed on the virtual asset exchange Bithumb. With this ruling, Bithumb can maintain normal business activities while continuing its legal response to the sanctions imposed by the Financial Intelligence Unit (FIU). The suspension was initially expected to pose a significant threat to the exchange's operations, as it included restrictions on virtual asset transfers for new members.

The court's decision is interpreted as providing a temporary shield for Bithumb to fight against the regulatory authorities' aggressive sanctions and as an intention to minimize market confusion.

In March 2026, financial authorities imposed a partial business suspension along with a fine of approximately $24.6 million (about 34 billion KRW) on Bithumb. This followed an investigation finding that Bithumb violated Anti-Money Laundering (AML) obligations, such as continuing transactions with unregistered virtual asset service providers. Bithumb filed for an injunction to suspend the effect of these sanctions, claiming they were excessive, and the court accepted it.

Background of Regulatory Tightening and 6.65 Million Violation Cases

The FIU's sanctions were derived after identifying approximately 6.65 million violation cases involving Bithumb and unregistered virtual asset service providers. Authorities determined that Bithumb showed significant flaws in its customer due diligence (CDD) procedures and transaction monitoring systems. In particular, regulatory violations occurring during asset transfers with unregistered overseas exchanges became a major point of contention, as they were considered acts that undermined the transparency of the Korean virtual asset market.

• Mandatory 5-minute asset reconciliation for all virtual asset exchanges
• Strengthened monitoring and penalties for transactions with unregistered virtual asset service providers
• Expansion of financial authorities' supervisory power under the Virtual Asset User Protection Act

The decisive trigger for this regulatory tightening was the so-called 'fat finger' incident that occurred on February 6, 2026. At the time, Bithumb intended to pay users 620,000 KRW as part of a promotion, but a system error led to the unprecedented situation of depositing 620,000 BTC. Based on the Bitcoin price at the time, an astronomical amount ranging from approximately $44 billion to $56 billion was misallocated.

Due to this error, some users immediately sold their Bitcoin, causing the price of Bitcoin on Bithumb to plummet and increasing market confusion. The Financial Supervisory Service (FSS) launched a high-intensity investigation into Bithumb's overall operating systems following this incident, and the investigation is still ongoing. The court's stay of execution is significant in that it gives Bithumb a chance to avoid a fatal blow in its market share competition with Upbit and to reorganize its internal control systems.