South Korean regulatory and prosecutorial bodies are significantly intensifying their scrutiny of the nation’s volatile virtual asset market, spurred by major financial irregularities uncovered at Bithumb, one of the country’s largest cryptocurrency exchanges. The expansion of these probes follows extensive investigations into what has been described as a colossal financial blunder, or alleged fraudulent dealings, totaling approximately 59 trillion KRW (roughly $44 billion USD) tied to manipulative transactions and executive mismanagement at the exchange.
The Seoul Southern District Prosecutors’ Office, often dubbed the ‘crypto specialized’ unit, is leading the augmented investigative efforts. Initially focusing heavily on alleged embezzlement and market manipulation by Bithumb’s former and current high-ranking executives, the scope has now broadened considerably. Authorities are now looking into the systemic listing practices, trading transparency, and anti-money laundering (AML) compliance of smaller and medium-sized exchanges across the country.
Regulators, including the Financial Services Commission (FSC) and the Financial Intelligence Unit (FIU), are working in parallel with prosecutors to ensure that exchanges are adhering strictly to existing financial reporting requirements and preparing adequately for upcoming legislative changes. The government’s priority is to mitigate systemic risk and restore battered investor confidence ahead of the full implementation of the Virtual Asset User Protection Act. This concerted effort signals a firm zero-tolerance policy towards illicit activities that could destabilize the world’s third-largest crypto trading market.
Source: South Korea expands crypto market probes after $44B Bithumb Bitcoin blunder
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