FSS chief: 'Confirmed shortcomings in Bithumb’s internal controls… reviewing possible sanctions'

Lee Chan-jin, Governor of the Financial Supervisory Service (FSS), said on the 26th, “Through an inspection, we have confirmed all issues related to shortcomings in Bithumb’s internal controls.”

Speaking at a monthly press briefing held at the FSS headquarters in Yeouido, Seoul, he said, “We conducted and completed an on-site inspection from February 10 to March 6 (related to Bithumb’s erroneous payment incident).” He added, “We are conducting additional legal review regarding potential violations of the Virtual Asset User Protection Act,” and said that “whether there was a (legal) violation and what sanctions to take are currently under review.”

Following Bithumb’s bitcoin erroneous payment incident, the FSS recently carried out on-site checks of the country’s five major virtual-asset exchanges. Lee said, “We reviewed overall matters such as what the asset status is, how events that provide financial benefits are being run, and what procedures or control mechanisms are in place,” adding, “Once improvement measures are finalized, they will be announced at the government level.”

Regarding the FSS recently submitting to the National Assembly an opinion that virtual-asset exchanges should be regulated to bank-level standards, he explained that it was “from the perspective of strengthening user protection.” He said, “As the Virtual Asset User Protection Act is transitional legislation, the supervisory authority stated its position on areas related to regulatory blind spots,” adding, “Institutional supplementation is needed for areas that are not currently subject to the Corporate Governance Act, the Electronic Financial Transactions Act, or the Financial Consumer Protection Act.”