The Financial Intelligence Unit (FIU) under the Financial Services Commission is expected to issue a decision on the 29th on Bithumb's request to suspend the execution of a six-month partial business suspension imposed on the virtual asset exchange. Bithumb argued that if the six-month partial business suspension is enforced, normal business operations will become impossible. The FIU countered that the impact on business activities is limited.
According to related industry sources on the 24th, the previous morning the Administrative Division 2 of the Seoul Administrative Court (Presiding Judge Gong Hyun-jin) held the first hearing on Bithumb's case seeking a stay of execution of the partial business suspension against the FIU. The court is examining whether there is a need to temporarily halt the effect of the sanction until a ruling is reached in the main lawsuit contesting the substantive cancellation of the suspension.
In this case, Bithumb appointed several former judges now at BAE, KIM & LEE LLC. Notably, attorney Song Woo-cheol (64, 16th Judicial Research and Training Institute class) retired in 2013 after serving as the senior judicial researcher at the Supreme Court, a presiding judge at the Seoul High Court, and the senior presiding judge at the Seoul Administrative Court. Park Tae-joon (59, 22nd class), Kim Sung-soo (53, 24th class), Kim Kyung-mok (52, 26th class), and Lim Hyo-ryang (48, 34th class) are former presiding judges and a senior researcher at the Constitutional Court, respectively. The FIU appointed attorney Lim Hye-jin (48, 31st class) of Dongin as its counsel, who previously served as a high court judge at the Seoul High Court.
At the hearing, Bithumb said that if the six-month partial business suspension is enforced, deposits and withdrawals of virtual assets by new customers will be restricted, making normal business operations virtually impossible. It argued that if the main lawsuit proceeds while the sanction is in effect, it will be difficult to recover losses even if it wins. The FIU responded that this suspension is limited to a portion of Bithumb's overall transactions and that the impact on revenue or operations is limited, adding that it is difficult to recognize irreparable harm.
There was also a clash of views over the Act on Reporting and Use of Specific Financial Transaction Information (the Specific Financial Information Act), which formed the basis for the authorities' sanctions. Bithumb argued that, based solely on the current text of the act, it is difficult for a business operator to foresee restrictions on transactions with unregistered virtual asset service providers and business suspensions for violations, claiming there is a regulatory gap. The FIU countered that the obligation to prohibit transactions with unregistered virtual asset service providers is clear under the law and said the claim of a regulatory gap is not valid.
In response, the court asked Bithumb to provide additional explanations detailing the specific damages caused by the suspension. It asked the FIU to submit concrete details on any adverse effects on public welfare from crimes involving the use of virtual assets if the court stays the execution of the suspension. The court decided to conclude the hearing on the 29th, a day before the suspension is set to take effect on the 30th.
Earlier, the FIU said Bithumb violated 6.65 million obligations, including the duty to prohibit transactions with unregistered virtual asset service providers under the act, customer due diligence, and transaction restrictions, and on the 16th imposed a six-month partial business suspension and other heavy sanctions along with fines of 36.8 billion won. The six-month partial business suspension is the highest level of sanction imposed so far on a domestic won market exchange.