Core Insights - Bithumb, South Korea's second-largest crypto exchange, is shutting down its USDT market and order-book-sharing with Stellar Exchange due to regulatory scrutiny over anti-money laundering controls [1][2] Regulatory Investigation - The Korea Financial Intelligence Unit (FIU) initiated an on-site investigation at Bithumb on October 1, 2025, focusing on potential loopholes in anti-money laundering protocols related to order-book sharing [2][3] - The investigation examined weaknesses in Know Your Customer (KYC) procedures and compliance with the Travel Rule, particularly concerning partnerships with overseas exchanges [2][3] Partnership with Stellar Exchange - Bithumb announced its USDT market beta on September 22, 2025, in collaboration with Stellar Exchange to enhance liquidity through order book sharing [4] - Concerns arose regarding oversight when it was revealed that BingX staff were working at Bithumb's Seoul headquarters, raising questions about regulatory compliance [5] Compliance Challenges - South Korea enforces strict regulations under the Act on the Protection of Virtual Asset Users, which includes asset management, customer protection, and transaction monitoring [6] - Authorities are worried that cross-border partnerships may complicate compliance with anti-money laundering and KYC enforcement [6] Impact on Users - All outstanding USDT market orders on Bithumb will be canceled, and API services related to the market will be suspended, although the affected cryptocurrencies remain tradable in Korean Won [7] - Bithumb stated that the closure aims to provide a more stable trading environment through system improvements, with updates on any potential reopening to be communicated later [8]