South Korean Court Halts Bithumb Suspension Amid Legal Dispute

• Court suspends Bithumb sanction, allowing operations to continue pending final ruling.
• Regulators cite 6.65M violations and impose 36.8B won fine on Bithumb.
• Bitcoin error triggers losses compensation offered while legal action is considered.

A South Korean court has halted enforcement of a regulatory sanction against crypto exchange Bithumb, delaying a six-month suspension of its operations while legal proceedings continue. The decision pauses one of the severe penalties issued to a domestic digital asset platform, allowing the exchange to continue certain services pending a final ruling.

According to the report, the Seoul Administrative Court’s 2nd Administrative Division approved Bithumb’s request for a stay of execution on April 30. The exchange had filed the application alongside an administrative lawsuit, seeking to block 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 had imposed the sanction following findings 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.

The regulatory case unfolds alongside a separate legal issue tied to 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.

In response, 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.

Related: South Korea Slaps Bithumb With $27M Fine and Six-Month Business Suspension