Financial regulators pushed Bithumb to suspend its Tether Market services, which allowed customers to buy and sell Bitcoin and nine high-cap altcoins using USDT, say South Korean publications.
The crypto exchange said the service was still in Beta mode and involved an order book sharing agreement with the Australian crypto exchange Stellar.
Bithumb says it will close the service at 11am KST on November 28 due to system maintenance and that it will be reorganised to “provide a more stable and advanced trading environment.”
“We will provide a separate update regarding the service’s reopening schedule,” Bitthumb wrote.
The move could put an end to the practice of order book sharing with international partners, with regulators apparently unconvinced that exchanges are meeting their anti-money laundering-related obligations.
Bithumb has ‘given up’ on order book sharing, say sources
All pending orders placed after the November 28 deadline will be automatically cancelled, the exchange added.
The South Korean publication Dailyan, quoting unnamed sources, said the crypto industry thinks Bithumb has “effectively given up” on its service “after two months of intense investigation and pressure from financial regulators.”
Neither Bithumb nor Stellar immediately responded to DL News’ requests for comment.
A crypto exchange’s order book is a real-time list of all active buy and sell orders for a trading pair. Order book sharing allows for the real-time integration of buy and sell order histories across different exchanges.
These allow Bithumb customers to execute orders from not only other Bithumb users, but also from overseas partner exchanges: in this case, Stellar.
Regulatory scrutiny intensifies
Shortly after Bithumb launched its Tether Market service, the regulatory Financial Intelligence Unit, also known as the FIU, summoned the exchange’s CEO Lee Jae-won for questioning.
The FIU expressed concerns over the service’s potential to expose domestic customers to personal data leaks and money laundering-related risks.
Order book sharing means that “domestic and international transactions are processed together, which increases the risk of money laundering,” an unnamed crypto industry insider told Korea Times in September. “That makes it an issue that regulators cannot ignore.”
Earlier this week, the FIU conducted an on-site inspection at Bithumb, as well as the exchanges Dunamu, Coinone, Korbit, and GOPAX.
The regulator said it wanted to gauge the exchanges’ compliance with money-laundering regulations.
The South Korean media outlet Newsis reported that Bithumb also “underwent an additional on-site inspection” at the hands of the FIU. This probe was “related to its order book,” the outlet explained.
Tim Alper is a news correspondent at DL News. Got a tip? Email at [email protected].
