Upbit is at risk of suspension and penalties as a result of AML and KYC violations.
Maeil Business Newspaper reported on Jan. 16 that Upbit, the leading cryptocurrency trading platform in South Korea, is at risk of business suspension and penalties as a result of its failure to comply with anti-money laundering (AML) regulations, specifically in relation to its Know Your Customer (KYC) procedures.
On January 9, the Financial Intelligence Unit (FIU) of South Korea’s Financial Services Commission, which is responsible for anti-money laundering (AML) and counter-terrorism financing (CFT) compliance, released a preliminary notice of sanctions that targeted Upbit.
The sanctions could prevent the exchange from accepting new consumers for a period of up to six months while allowing current users to continue transacting. Upbit, the largest cryptocurrency exchange in South Korea, currently manages more than 70% of the nation’s digital asset transaction volume.
The action is the result of an investigation that revealed approximately 700,000 instances in which Upbit did not properly carry out KYC procedures. Maeil stated that violations of the Specific Financial Transaction Information Act may result in fines of up to 100 million won per case.
The FIU also accused Upbit of violating local regulations by conducting transactions with unregistered overseas crypto businesses.
Upbit’s representative responded to this statement by asserting that it was challenging to determine whether it was an undocumented overseas exchange on the blockchain in advance.
Upbit is required to respond to the allegations by January 20. On January 21, the Federal Investigation Unit (FIU) will meet to finalize sanctions, which may involve a temporary cessation of operations.
Since its expiration in October 2024, Upbit’s business license renewal has been under review. The sanctions could potentially impact this process.
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