Bithumb and FIU clash in court over crypto withdrawal regulations

South Korea’s financial authorities and crypto exchange Bithumb faced off in court regarding a six-month partial business suspension imposed on Bithumb. On Oct. 22, the Seoul Administrative Court’s Second Administrative Division conducted the first hearing in Bithumb’s lawsuit aimed at overturning the suspension ordered by the Financial Intelligence Unit (FIU). The dispute centered on whether exchanges must verify counterpart exchanges for virtual-asset withdrawals under 1 million won and whether Bithumb knowingly allowed illegal transactions. Bithumb contended it had no obligation to verify the receiving exchange for small withdrawals, complicating efforts to block illicit transactions. The FIU argued that Bithumb was aware of its responsibility to prohibit transactions with unregistered overseas exchanges but failed to implement necessary blocking measures, indicating intent or gross negligence.

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