Upbit, South Korea’s leading cryptocurrency exchange, is in hot water after being cited for failing to meet anti-money laundering (AML) regulations. The South Korean Financial Intelligence Unit (FIU) announced a suspension of the platform’s operations due to significant violations. Reports indicate that the penalties were detailed in a communication from the FIU on January 9.

What Violations Did Upbit Commit?

The FIU’s investigation uncovered that Upbit had not adhered to its “Know Your Customer” (KYC) responsibilities, leading to around 700,000 breaches. Under the Special Act on Reporting and Use of Financial Information, each violation can incur fines up to 100 million South Korean won (approximately $68,596).

What Are the Potential Penalties for Upbit?

If the penalties are finalized, Upbit could face a six-month ban on onboarding new users. The FIU has requested Upbit to submit a response to the proposed penalties by January 15, with a final decision expected the following day.

Holding a dominant 70% market share in South Korea, Upbit is the world’s third-largest centralized cryptocurrency exchange, with a reported trading volume exceeding $283 billion in December 2024. This situation highlights the necessity for cryptocurrency platforms to maintain compliance with stringent regulations.

• Upbit is suspended for failing KYC requirements.
• Approximately 700,000 violations were identified.
• Potential six-month user registration halt is imminent.
• FIU deadline for Upbit’s response is January 15.

This situation emphasizes the critical nature of regulatory compliance for cryptocurrency exchanges, especially as they navigate a complex international landscape. The outcome of Upbit’s case could have wider implications for the industry as a whole.