In November 2024, South Korean supervisory authorities launched one Investigation of Upbitthe country’s largest digital exchange exchange, to allegedly offend Know your customer (KYC) rules. The exchange is approaching to know its fate as the tension rises among other exchanges that are afraid that they may be next.
South Korea’s Commission on Financial Services (FSC) claimed that Embitter Had on board new users without doing the correct KYC checks. Through its financial intelligence unit (KofiU), the guard dog claimed that it had identified over 500,000 cases where the exchange had flowed the law.
In addition to KYC violations, Upbit is reportedly allowed its users to trade exchange which has not yet been given a license in South Korea.
Upbits operator Dunamu recently had a session with Kofiu officials to argue for their case. Local newspaper Korea Times reports that the guard dog now completed its sanctions on the exchange, which can range from restrictions on the withdrawal of users to fines against the management and the staff.
“Nothing has been decided yet, since the sanction procedures are still ongoing,” an FSC official told the newspaper. A Dunamu official promised to “give a thorough explanation through the upcoming procedures, including the Sanction Review Committee” in the coming days.
The fine can be massive. As a reference, when FSC found that the local exchange Hanbitco had failed to perform the correct KYC for only 200 users, that forced A KRW $ 2 billion ($ 1.24 million) fines, although a Seoul court later Valid the decision.
According to Korea Times, tensions in South Korea’s digital asset industry is high when Upbit is waiting for its fate. Other exchanges are afraid that they will be next when the guard dog finishes the Upbit investigation.
FSC has already conducted an inspection in place Quill and Gopax exchanges; Bothumb and Coin Is next for review later this year. After the top five, minor exchanges can face a similar fate.
“If a major player who is faced with sanctions, less virtual asset exchanges will inevitably feel even greater pressure,” an official told from a named exchange to the newspaper.
In fact, the smaller exchanges’ concerns are motivated. Before the current investigation, Upbit is believed to be the most compatible exchange in the country. It was the first one that registers With FSC during a renewed framework as early as 2021. When the supervisory authorities demanded that all exchanges have to implement reality for their users and establish a partnership with a local bank for and off-ramping, Upbit was also the first to announce compliance with compliance.
See: Future evidence of data control with pieter den Dooven
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