‘Ghost Coin’ Fallout Spreads as Authorities Weigh Bithumb Renewal Decision
‘Ghost Coin’ Fallout Spreads as Authorities Weigh Bithumb Renewal Decision
The review of Bithumb’s virtual asset service provider license renewal is increasingly likely to be prolonged in the aftermath of the Bitcoin overpayment incident. As controversy grows over responsibility for the accident and damage to market trust, financial authorities face deepening concerns given the limited legal grounds available under current law to deny the renewal.
According to financial authorities and industry sources on the 12th, Bithumb applied for renewal of its virtual asset service provider registration in October 2024, and the review is currently underway. Under the Act on Reporting and Use of Specified Financial Transaction Information, virtual asset service providers must renew their registration every three years, with final authority resting with the Financial Intelligence Unit (FIU). However, related practical tasks may be delegated to the Financial Supervisory Service.
The issue is the Bitcoin overpayment incident that occurred during the review process. As on-site inspections are currently being conducted by authorities, the FIU’s position is that it is difficult to determine whether to approve the renewal before the results are finalized. However, some point out that the legal grounds for denial under the Act are limited to cases such as failure to obtain information security management system certification, failure to use real-name verified deposit and withdrawal accounts, or less than five years having passed since a final conviction of a specified financial crime resulting in a fine or heavier penalty. As such, there are legal limitations to citing this incident as direct grounds for denial.
A senior official at the Financial Services Commission stated, “It appears difficult for Bithumb’s renewal review to be concluded early.” Another official explained, “This inspection focuses more on potential violations of the Virtual Asset User Protection Act rather than the Specified Financial Information Act,” adding, “If approval is denied for reasons not explicitly stated in the law, it could itself raise legal issues.”
Despite the major incident that shook market trust, the lack of clear legal grounds to reflect it in the renewal review highlights the limitations of the current regulatory framework. Analysts suggest that the structural gap—stemming from the past approach of not recognizing virtual assets as formal financial assets and designing regulations primarily around anti-money laundering—has been fully exposed in this case. This context also underlies the government’s push to expedite the enactment of the Digital Asset Basic Act.
Some observers speculate that rather than issuing a denial decision, authorities may effectively place the renewal process on long-term hold until Bithumb sufficiently establishes measures to restore market trust. However, under current law, the company may continue operating even if the review period is prolonged. Although Bithumb’s existing license expired in December 2024, the date of final approval notification by the authorities is regarded as the new expiration date.
Disclaimer: This article is for investment reference only and the publisher is not responsible for any investment losses arising from its use. The content should be interpreted solely for informational purposes.
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