The South Korean government wrestling to contain runaway cryptocurrency trade without stoking catastrophic burst in the bubble delivered its first showcase punitive action on the biggest virtual money trading platform.

The Korea Communications Commission (KCC) in charge of overseeing wireless and internet industry decided on a fine of 58.5 million won ($53,542) on Bithumb for privacy negligence that resulted in personal data theft of more than 36,000 people.

It was the first penalty imposed on a virtual currency exchange in Korea where the government has recently decided to toughen up surveillance and clampdown on criminal activities amid a wild speculative frenzy in the bitcoin.

The KCC on Tuesday decided to fine BTC Korea.Com, an operator of Bithumb, and issued administrative corrective orders, saying that the company failed to comply with personal data protection rules, which led to leaks of private information and financial damages. The KCC and Korea Internet & Security Agency (KISA) found that BTC Korea.Com stored personal data without encrypting it and did not update antivirus software, which resulted in the theft of personal data of 31,506 users and account information of 4,981 people.

The watchdog said the amount of penalty was determined based on BTC Korea.Com’s average sales over the last three years of 2.07 billion won under the current information and communication law. The company admitted to the wrongdoings and vowed to strengthen security system, according to the KCC.

By Oh Chan-jong and Choi Mira

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