South Korea's Financial Supervisory Service has completed an on-site inspection related to Bithumb's erroneous bitcoin payout and has started a sanctions review.

The watchdog finished the inspection on March 6 and has since been conducting internal review procedures, industry sources said on Tuesday. It was also reported to have focused on problems in Bithumb's internal control system.

Bithumb on Feb. 6 mistakenly paid 2,000 bitcoin each to 249 people during an event reward payment process, instead of 2,000 won per person. The amount was worth about 60 trillion won and was 14 times Bithumb's holdings.

The watchdog launched an on-site check the day after the incident and switched to an inspection on Feb. 10, three days later. It focused on issues including that a comparison between ledger quantities and actual coin wallet balances was conducted only once a day, and internal control loopholes that allowed a large payout due to one worker's mistake.

A worker discovered the erroneous payment about 20 minutes later while checking a test account. The watchdog also investigated the system structure, including the possibility of generating ghost coins, and reviewed past cases of erroneous payments.

The level of sanctions will be decided after internal deliberations based on the inspection results. An FSS official said, "We have checked the parts where current law can be applied and are reviewing sanctions."

Separately, the Financial Intelligence Unit (FIU) gave Bithumb prior notice of heavy sanctions, including a partial business suspension for 6 months, for violating anti-money laundering obligations. The final sanctions will be confirmed by a sanctions deliberation committee.