Crypto Exchange Upbit Gets Suspension Notice from South Korean Regulator
If confirmed, the suspension will prevent Upbit from accepting new customers for up to six months.
The suspension also comes as Upbit’s business license, renewed in October 2024, is under review by regulators.
Upbit is facing potential fines of up to 100 million won per violation for failing to properly implement KYC procedures.
In a major regulatory crackdown, South Korea’s top regulatory body is working on issuing a suspension order to the country’s largest crypto exchange Upbit. This development comes alleging that the exchange failed to meet anti-money laundering (AML) obligations, including the violation of its customer identification system (KYC).
As per the latest report on Thursday, January 16, sources familiar with the matter stated that the Financial Intelligence Unit (FIU) of the Financial Services Commission issued a notice to Upbit last week.
If the regulatory confirms the sanctions, Upbit will have to cease accepting new customers for nearly six months. However, during the suspension period, existing users would still be able to trade on the platform, a local news publication. With over 70% of the domestic virtual asset trading market share, the suspension could significantly impact the exchange’s operations.
The cryptocurrency exchange has to submit a response to the FIU by January 20. After this, the regulator will closely review the exchange’s explanation during a sanctions hearing on January 21 before making a final decision on the suspension.
Upbit Faces Severe Sanctions Over KYC Violations
The recent move of sanctions on Upbit shows a shift towards a stricter regulatory approach for the crypto industry in South Korea. The sanctions raise concerns within the virtual asset industry, with many questioning how they could impact Upbit’s upcoming business license renewal review.
Last year in October 2024, Upbit renewed its license, which is currently under review, and financial authorities are scrutinizing the company’s compliance following on-site inspections. In total, the FIU has discovered 700,000 cases of KYC violations.
In addition to the potential suspension of operations, the FIU is considering imposing fines of up to 100 million won per violation. The regulator has also found that Upbit has conducted business with unreported overseas virtual operators, which complicates the situation further.
An Upbit representative stated that the company did not intend to violate regulations. He explained that was difficult to determine in advance whether overseas exchanges were unreported due to the nature of blockchain transactions.
South Korea Fast Tracks Crypto Regulations
South Korea is now working to finalize its crypto regulatory framework and has launched official discussions to speed up the process. Thus, the regulators are working to bring the first draft by the second half of 2025.
The country’s top regulator, the Financial Services Commission (FSC), recently held a meeting for the same. For the upcoming , the FSC has outlined major target areas for the same.