Upbit Faces Potential Sanctions in South Korea

Upbit may face penalties for alleged South Korean financial regulation violations.

In simpler terms, it’s possible that Upbit, the largest cryptocurrency exchange in South Korea, could be subjected to penalties from their Financial Services Commission due to accusations of not adhering to know-your-customer (KYC) and anti-money laundering regulations.

Last week, we learned that our platform was issued a procedural sanctions notice by the Financial Information Analysis Institute of the Financial Services Commission, as reported by local newspaper Maeil.

By January 20th, Upbit needs to present a well-structured defense against the imposed penalty. After evaluating their response, the Financial Intelligence Unit (FIU) will make a conclusive judgment regarding this situation.

If the penalty stands, it might prevent fresh users on Upbit from making asset withdrawals for around half a year. Moreover, their cryptocurrency license renewal was temporarily halted last year during the continuation of an ongoing probe.

The potential penalty is a part of South Korea’s broader initiative to tackle regulatory violations, especially after the $60 billion collapse of Terra’s ecosystem in 2022. In the aftermath of Terra’s failure, the Financial Services Commission (FSC) has intensified its investigation into cryptocurrency exchanges and digital asset operators.

By the close of 2025, South Korea intends to establish fresh rules governing cryptocurrencies, with the goal of harmonizing their local digital asset market. This move seeks to safeguard consumers while simultaneously fostering business growth.

A key aspect of the plan involves relaxing limitations on cryptocurrency transactions within institutions and potentially granting verified individuals access to real-named accounts for trading purposes.

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2025-01-16 19:23