Bithumb’s board is pushing to reappoint CEO Lee Jae-won for a new two-year term

Despite a costly $43 billion dollar mistake, a looming 6-month suspension and having to pay the highest fine ever for a South Korean VASP, Bithumb’s board members intend to reappoint the current CEO, Lee Jae Won. 

The executive’s reappointment would not have even been a matter for consideration if not for a legal loophole that might not be around forever. 

Under South Korean law, crypto exchanges are not legally classified as financial institutions, giving Bithumb’s board the opportunity to propose the reappointment of the current CEO rather than him being forced to step down. 

Bithum’s CEO could be coming back after $43 billion mistake

Bithumb, South Korea’s second-largest cryptocurrency exchange, will hold a high-stakes shareholders’ meeting on March 31, 2026, to decide if Lee Jae-won will remain the CEO. 

Just last month, a “fat-finger” error resulted in the accidental distribution of 620,000 Bitcoins. The company managed to recover the vast majority of these funds, but the incident exposed deep structural vulnerabilities. 

Bithumb is also currently facing a six-month partial business suspension, and yet the company’s board of directors has formally proposed the reappointment of current CEO Lee Jae-won.

Under South Korean law, executives at traditional financial institutions are often forced to step down if they receive a reprimand warning from the Financial Intelligence Unit (FIU). However, cryptocurrency exchanges are currently classified as Virtual Asset Service Providers (VASPs) rather than formal financial institutions.

Bithumb is taking advantage of this loophole to keep Lee in his current position. They claim he is needed to navigate the exchange through its most recent regulatory challenges. 

In one recent accident reported by Cryptopolitan, an employee mistakenly entered BTC as the payment unit instead of KRW during a “Random Box” promotion, causing the system to credit users with 2,000 BTC ($132 million) each, instead of 2,000 won ($1.38). 

In total, $43 billion worth of Bitcoin was “created” on the exchange’s internal ledger. The amount was nearly 15 times more than the exchange actually held in its reserves. 

The Financial Supervisory Service (FSS) has nearly completed its investigation into this “ghost coin” incident. 

Lawmakers, including Rep. Kang Min-guk, have criticized the FSS for failing to detect these system flaws during six previous inspections conducted between 2022 and 2025.

Bithumb also recently received a 36.8 billion won fine from the FIU for failing to uphold anti-money laundering (AML) and know-your-customer (KYC) standards. The looming six-month partial suspension of operations would restrict new users from transferring assets off the platform. 

CEO stepped down after Upbit mishaps 

In early 2025, the former CEO of Dunamu, Lee Sirgoo, received a reprimand warning for AML and KYC violations, but unlike Bithumb, Dunamu chose to change its leadership. 

Lee Sirgoo stepped down roughly three months after the reprimand and assumed an advisory role to protect the company’s reputation and facilitate its license renewal process. The company received a 35.2 billion won fine. 

Bithumb’s board, along with a new two-year term for Lee Jae-won, is seeking shareholder approval to double its issuance limit for convertible bonds and bonds with warrants to 300 billion won ($225 million). 

The exchange has also proposed appointing Jung Yeon-dae, an adjunct professor at Sogang University and a tax expert, as a new auditor in response to the FSS’s findings of “complacent supervision.”

Bithumb is still under investigation for its order book sharing arrangement with Stellar Exchange, an unregistered operator in South Korea. The exchange could jeopardize its ability to renew its VASP license, and additional sanctions could be imposed.

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