South Korea turns up pressure on crypto exchanges Upbit, Bithumb

The FTC’s on-site investigation at Bithumb centers on marketing claims about liquidity. The exchange is suspected of false advertising after it said in multiple press releases in March and April last year that its liquidity was the highest among domestic crypto exchanges, according to the report. The authority is examining whether those claims breached a local advertisement law that can trigger sanctions for deceptive or exaggerated promotions. Bithumb declined to comment on the ongoing investigation.

The gap between headline claims and market share is one of the pressure points regulators are now leaning on. Citing CoinGecko data, the report said Upbit held the top position in South Korea with a 68% share of cryptocurrency trading volume last year, while Bithumb ranked second with 28%. That disparity is part of the FTC’s rationale for checking whether “liquidity leadership” messaging crossed into misrepresentation.

In parallel, Dunamu is under FTC investigation over allegations tied to Stockplus, its unlisted stock trading platform. The company is accused of restricting rivals from trading Dunamu’s own unlisted shares, with transactions available only on Stockplus—conduct the report framed against a local fair trade provision that bars firms from unfairly refusing transactions. Dunamu also declined to provide details.

The regulatory tension sits on a structural distinction: crypto exchanges in South Korea are not legally designated as financial institutions, which has historically left them outside some of the tighter governance and conduct requirements applied to banks, brokerages and other regulated finance entities. The FTC’s action is being read as part of a broader government effort to tighten the perimeter around “quasi-financial” crypto platforms, especially as their profitability rebounds during active trading cycles.

Earnings figures have amplified the debate. The report said Dunamu posted net profit of 239 billion won ($163 million) in the third quarter of last year, up 308% from a year earlier, while Bithumb’s net profit rose to 105.4 billion won, up 3,285% over the same period. Those numbers have helped fuel arguments that exchanges have become systemically important market utilities—without being subject to the same institutional framework as legacy finance.

The investigations also land after South Korea began building a more formal rulebook for the sector, including a “virtual asset user protection” law that took effect in 2024 and pushed exchanges toward tighter listing reviews and investor-protection controls. For now, the FTC’s focus is narrower—advertising practices, competition and transaction access—but the message is broader: in Seoul, the compliance perimeter around crypto trading venues is still expanding, and it is increasingly being enforced through multiple regulators with different toolkits.