South Korea’s Financial Intelligence Unit (FIU) has announced an extension of its on-site inspection of the Bithumb cryptocurrency exchange, with a similar inspection of Coinone set to begin next week. The FIU, which operates under the Financial Services Commission (FSC), is expected to conclude its investigation on April 18, following an initial start date of March 17 and an original end date of March 28. The primary focus of the probe is to assess the exchanges’ compliance with anti-money laundering regulations.
After completing inspections at Korbit, GOPAX, and Upbit, the largest cryptocurrency exchange in the market, the FIU is now turning its attention to Bithumb and Coinone. The investigation of Upbit revealed several violations related to Know-Your-Customer (KYC) verification, resulting in a three-month punishment from the FSC. A recent decision by the Seoul Administrative Court temporarily suspended this ban for 30 days.
According to reports from the media outlet Daehan Kyungjae, an anonymous official from a domestic cryptocurrency exchange suggested that the FIU’s extension may be due to the extensive amount of data being analyzed. There are also suspicions of a specific transaction involving Bithumb wallets transferring a significant amount of coins to an unregistered exchange, raising concerns about potential regulatory breaches.
The FIU is scheduled to commence its on-site inspection at Coinone on April 21, following the completion of the investigation at Bithumb. Additionally, the Financial Supervisory Service (FSS) recently concluded its own investigations at both Bithumb and Coinone. The FSS probe of Bithumb uncovered misuse of company funds for housing allowances, with allegations that former executives utilized company-provided deposits for personal real estate transactions.
Coinone faced its own regulatory scrutiny last year following a significant price spike of MOVE tokens on its platform. The Seoul Southern District Prosecutors’ Office’s crypto investigation team conducted a raid on Bithumb’s headquarters in response to these allegations.
Overall, the South Korean regulatory authorities are intensifying their efforts to ensure compliance within the cryptocurrency exchange sector. The ongoing inspections and investigations aim to address potential violations of anti-money laundering regulations and other financial misconduct, signaling a commitment to maintaining a secure and transparent cryptocurrency market in South Korea.