South Korean Court Stays Six-Month Bithumb Suspension

Judge Gong Hyeon-jin of the Seoul Administrative Court has accepted crypto exchange Bithumb's request for stay of execution, halting a six-month partial business suspension imposed by South Korea's Financial Intelligence Unit (FIU).

What's the Scoop?

• Money Laundering Concerns: In March, the FIU levied a ₩36.8B (~$24.6M) fine and partial business suspension that would have halted the transfer of external crypto assets for new customers on crypto exchange Bithumb, citing the exchange's failure to verify the identities of 6.65M user accounts. South Korea has notoriously strict capital controls, limiting cross-border transfers and heavily monitoring foreign exchange flows, conditions that have historically made cryptocurrencies an attractive workaround to bypass regulation.
• Stay of Execution: The suspension was originally set to take effect on March 27, but was delayed after Bithumb filed an for an injunction against the FIU on March 23, which kept the sanctions on hold. As per the temporary stay of execution handed down by Judge Gong Hyeon-jin, Bithumb can continue operating as normal until the Court issues a final ruling in this matter. "We plan to faithfully present our position throughout the remaining legal proceedings," Bithumb said in a comment to The Korea Herald.
• Widespread Enforcement: Since early last year, the FIU has imposed heavy penalties on the nation's largest won-based crypto exchanges – including Upbit operator Dunamu, Bithumb, Coinone and Korbit – for violating the Special Financial Transactions Act. All except for Korbit have filed administrative lawsuits to overturn their sanctions.