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South Korea’s largest cryptocurrency exchange, Upbit, is facing penalties for violating anti-money laundering obligations. The country’s financial regulator has imposed a suspension on Upbit’s operations. According to a local news source, Maeil Business News, the penalty decision was announced by the Financial Intelligence Unit (FIU) of South Korea on January 9.
Serious Allegations Against Upbit
The FIU found Upbit deficient in its “Know Your Customer” (KYC) obligations. The investigation revealed that Upbit had committed approximately 700,000 violations. According to South Korea’s Special Act on Reporting and Use of Financial Information, such violations can result in fines of up to 100 million South Korean won (approximately $68,596) per exchange.
It was noted that Upbit should only serve South Korean citizens with verified real names, yet the platform reportedly also services international users. Additionally, Upbit’s operational license expired last October, and its renewal application is still under review.
New User Registrations May Be Halted for Six Months
If the penalty is finalized, Upbit may not be able to serve new users for six months. The FIU has given Upbit until January 15 to present its views regarding the penalty. The final decision is expected to be announced the following day, on January 16.
Upbit holds about 70% of the cryptocurrency market share in South Korea. Globally, it has established a strong position, becoming the world’s third-largest centralized cryptocurrency exchange with a trading volume exceeding $283 billion in December 2024.
This punitive decision against South Korea’s largest cryptocurrency exchange underscores the importance of compliance with stringent regulations in the sector.
