Bithumb Braces for FIU’s AML & KYC Penalty Hammer in Early 2026

Regulatory storm clouds gather over one of South Korea's crypto giants.

The Countdown Begins

The Financial Intelligence Unit (FIU) is sharpening its knives. Sources confirm a major enforcement action targeting Bithumb's anti-money laundering (AML) and know-your-customer (KYC) protocols is locked and loaded for the first quarter of 2026. This isn't a routine slap on the wrist—it's shaping up to be a landmark case.

Compliance Under the Microscope

The move signals a brutal new phase in Seoul's crypto crackdown. Exchanges can no longer fly under the radar with half-measures. The FIU's message is clear: align fully with global financial surveillance standards or face existential consequences. For Bithumb, the bill for past compliance shortcuts is about to come due—with interest.

A Chilling Effect for the Market?

While the exact penalty figures remain under wraps, the precedent will reverberate across Asia's trading floors. Heavy fines could squeeze liquidity and operational margins. Yet, paradoxically, a harsh ruling might ultimately strengthen the sector by burning out weak compliance practices—forcing the industry to grow up faster than any bull run ever could.

The Irony of It All

Here's the cynical twist: the same regulators now wielding the hammer spent years providing ambiguous guidance. It's the oldest play in the finance rulebook—let the industry innovate, then punish it for the very loopholes you failed to define. A tidy revenue stream dressed up as consumer protection.

The clock ticks down to early 2026. Bithumb's fate will tell us just how serious South Korea is about cleaning house—and whether other exchanges are next in line for a regulatory haircut.

Bithumb set to face penalties for AML violations

The exact fine amount is still pending official announcement, but sources familiar with the happenings in the industry claim that the identification of systemic AML failures is similar to those at Upbit and Korbit.

The exchange could receive a substantial fine, with sources estimating that it could match or exceed the $25 million that the financial regulator levied on Upbit. This is due to its huge market share and the additional investigation into its order book.

Reports highlighted that the FIU has already finalized its audits and has proceeded to sanctions. The violations of Bithumb include failure to carry out due diligence on its customers, which includes incomplete verification of user identities, such as unclear pictures, improper address checks, and a lack of enhanced due diligence for high-risk customers. Upbit recorded 5.3 million such cases, while Korbit only saw 12,800 cases.

In addition, Bithumb also allowed trades to be carried out by unverified users, violating rules that prohibit services until full KYC is completed. The platform also failed to report suspicious transactions, delaying or omitting reports on unusual trade activities to authorities.

The FIU also claimed that Bithumb supported transactions carried out with unregistered local and international exchanges, increasing the rate of money laundering carried out across the border.

FIU vows to stabilize the market to ensure trust

Unlike Upbit and Korbit, Bithumb faced extra investigation into its order book management, which regulators alleged involved manipulative practices or insufficient monitoring, which could further amplify the seriousness of penalties on the exchange.

The FIU mentioned that the issues it listed came from repeated or structural weaknesses, rather than isolated errors. The increase in volume of violations shows a lack of internal control despite Bithumb’s market dominance.

The FIU mentioned that it will finalize details after Bithumb submits a response to its initial findings, with the process expected to conclude in the early part of 2026. This aligns with its methodical rollout, emphasizing deterrence over disruption.

Meanwhile, the FIU has intensified scrutiny of major exchanges to ensure they are complying with AML and KYC rules. The latest set of penalties targeted crypto exchanges identified as the “Big Five”, which include Upbit, Coinone, GOPAX, Bithumb, and Korbit.

The FIU said it plans to carry out follow-up measures for the other on-site inspections. The regulator also mentioned that it plans to impose sanctions on serious violations of special financial laws, noting that it will serve as a warning to other crypto firms. It has also made it known that it is not relenting in its efforts to improve the AML capabilities of crypto exchanges.

The FIU said the violations appear to be caused by the rapid growth outpacing the compliance infrastructure, noting that it will support the crypto industry to grow with public trust.

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