The regulatory body in South Korea plans to temporarily halt operations at Upbit, stating that the digital currency exchange has not effectively carried out Know Your Customer (KYC) procedures.
According to reports from the Maeil Business Newspaper, South Korea’s Financial Intelligence Unit (FIU) has alerted Upbit, the nation’s leading cryptocurrency exchange, about a possible suspension due to breaches in Know Your Customer (KYC) regulations and Anti-Money Laundering (AML) responsibilities.
The Financial Intelligence Unit (FIU) notified Upbit on January 9 about potential disciplinary action, which could lead to a temporary ban of up to six months. During this period, they won’t be able to enroll new clients, but current users can still trade. Upbit has until January 20th to present their case in response to the findings by the FIU. After examining Upbit’s response, the FIU will make a conclusive decision regarding the suspension.
The regulatory body is examining if Upbit potentially breached any regulations by transacting with unlicensed overseas cryptocurrency companies. Upbit maintains that it was challenging to recognize foreign trading platforms priorly, yet asserts that they had no deliberate aim to disobey the law.
In my analysis as a financial analyst, I’ve observed that following Upbit’s reported violations, the Financial Intelligence Unit (FIU) has put a hold on the exchange’s license renewal. This pause is due to South Korean authorities needing extra time to scrutinize a substantial number of suspected Know Your Customer (KYC) breaches. If proven guilty, Upbit could be liable for fines reaching up to 100 million Korean won ($71,500) per case, which could amount to an impressive 35.8 billion Korean won ($27 million) given the high volume of cases under investigation.
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2025-01-16 17:28