CEO Lee Jae-won faces reappointment bid at Bithumb amid regulatory troubles: Report
South Korea's Financial Intelligence Unit has allegedly imposed a six-month partial operational suspension on Bithumb over violations related to anti-money laundering compliance.
According to a report from the Korea Times, Bithumb—which holds the position as South Korea's second-biggest cryptocurrency trading platform measured by trading volume—is looking to extend the appointment of its CEO Lee Jae-won despite facing recent allegations of anti-money laundering compliance violations and additional controversies surrounding the exchange.
The cryptocurrency trading platform plans to hold its annual shareholders' meeting scheduled for March 31, where a motion to retain Lee in his executive position will be presented for shareholder approval, as reported by the Korea Times on Sunday, which cited sources from within the industry.
Lee's present tenure is set to conclude at the end of this month, and if the renewal receives approval, it would extend his leadership role at the cryptocurrency exchange for an additional two-year period. Cointelegraph has reached out to Bithumb seeking additional comment on the matter.
According to data from CoinGecko, Upbit holds the number one position among South Korean cryptocurrency exchanges based on 24-hour trading volume, with Bithumb occupying the second spot and Korbit coming in third place.
Regulatory authorities impose sanctions on Bithumb
During March, reports indicated that South Korea's Financial Intelligence Unit levied a six-month partial operational suspension against Bithumb along with a financial penalty of 36.8 billion won ($24.2 million) relating to alleged violations of anti-money laundering regulations.
According to the imposed restrictions, the cryptocurrency exchange will face a prohibition on processing external cryptocurrency transfers for newly registered customers during the period spanning from March 27 through Sept. 26.
Additional regulatory scrutiny came to the exchange in February following an incident where it erroneously allocated 2,000 Bitcoin (BTC) to each user rather than the intended 2,000 Korean won ($1.40) as part of a marketing promotion, resulting in a distribution totaling 620,000 coins that the exchange could not adequately support with reserves.
The exchange is also currently waiting for results from a separate investigation examining its practice of order book sharing with an international trading platform, and further regulatory sanctions could create obstacles for the renewal of its operating license, the Korea Times reported.
Bithumb will be on edge awaiting the results of ongoing regulatory probes, as the company still needs to renew its virtual asset service provider license.
Industry official told the Korea Times
Cryptocurrency sector experiences growth in South Korea
South Korea's cryptocurrency sector has experienced advantages from a more favorable regulatory climate following the election of President Lee Jae-myung in June of last year, who has advanced multiple cryptocurrency-related legislative initiatives, including proposed legislation to authorize the use of stablecoins.
Just three months prior to that development, the number of cryptocurrency exchange users throughout South Korea exceeded 16 million, accounting for more than 30% of the nation's total population.
Based on projections from Statista, an online data analytics platform, the cryptocurrency market within South Korea is expected to generate $1.3 billion in revenue during 2026.