A South Korean court has temporarily blocked a regulatory sanction against the crypto exchange Bithumb, delaying a six-month suspension of its operations while legal proceedings continue. The decision, reached on April 30 by the Seoul Administrative Court’s 2nd Administrative Division, grants Bithumb’s request for a stay of execution. The exchange had filed the request alongside an administrative lawsuit to challenge the Financial Intelligence Unit’s enforcement order.
As a result, the suspension measure, originally scheduled to take effect in late March, will remain inactive until the court reaches a final judgment. The Financial Intelligence Unit imposed the sanction after finding that Bithumb violated multiple obligations under the Specific Financial Information Act. Authorities cited approximately 6.65 million breaches, including failures related to restrictions on transactions with unregistered virtual asset operators, customer identification requirements, and trading limitations. In addition to the operational restriction, regulators also issued a fine totaling 36.8 billion won.
This legal battle comes as Bithumb faces separate pressure over a past operational incident involving a mistaken Bitcoin distribution. Some users affected by the error are exploring the possibility of filing a class action lawsuit. The incident occurred on Feb. 6, when Bithumb intended to distribute small Bitcoin rewards worth 2,000 won to event participants. Instead, an internal error caused 2,000 Bitcoins to be transferred per user. With Bitcoin priced at about 98 million won at the time, the total misallocation reached approximately 62 trillion won.
Following the error, the platform experienced a surge in sell orders, causing Bitcoin prices on Bithumb to fall to about 81.11 million won, roughly 17% below prices on other exchanges. The discrepancy led to a short period of heavy selling lasting about 10 minutes, during which some users recorded losses.
Compensation Plan and Legal Options
In response to the incident, Bithumb introduced a compensation plan covering 100% of losses plus an additional 10%. The exchange also pledged fixed payments of 20,000 won to users who were logged in during the incident, as well as additional reimbursement for trades executed during the affected window. Despite these measures, legal consultations are ongoing. A Seoul-based law firm confirmed receiving inquiries regarding potential claims, including those related to emotional distress. However, officials noted that the number of cases has not yet reached a level required to initiate a formal class action.
The court’s decision effectively pauses one of the severest penalties issued to a domestic digital asset platform, allowing the exchange to continue certain services pending a final ruling. It remains unclear how the ongoing legal developments might impact Bithumb’s operations in the long term, especially as regulators continue to scrutinize the industry.
