Important points
- Upbit could be suspended or fined for AML and KYC violations.
- The Financial Intelligence Unit found 700,000 KYC process failures on Upbit.
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Upbit, which dominates South Korea's cryptocurrency trading market, faces suspension of operations and possible fines due to violations of anti-money laundering (AML) regulations, particularly regarding know-your-customer (KYC) practices, the Mainichi Keizai Shimbun reported on January 16. reported.
On January 9, the Financial Intelligence Unit (FIU) of the Korean Financial Services Commission, which oversees anti-money laundering (AML) and counter-terrorism financing (CFT) compliance, announced a preliminary notice of sanctions targeting Upbit. did.
The sanctions could restrict exchanges from registering new customers for up to six months, while allowing existing users to continue trading. Upbit, currently South Korea's largest cryptocurrency exchange, handles over 70% of South Korea's digital asset trading volume.
This action follows an investigation that revealed approximately 700,000 instances in which Upbit failed to properly implement KYC procedures. Based on the Specified Financial Transaction Information Act, each violation could be subject to a fine of up to 100 million won, Mayle said.
The FIU also accused Upbit of conducting transactions with unregistered virtual currency operators overseas, in violation of local regulations.
In response to this claim, an Upbit representative said, “It was difficult to determine in advance whether it was an unreported overseas exchange on the blockchain.''
Upbit has until January 20th to respond to the complaint. The FIU is scheduled to meet on January 21 to finalize sanctions, including temporary closure of the business.
The latest sanctions could affect Upbit's business license renewal, which has been under review since its expiration in October 2024.
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