South Korea’s Financial Intelligence Unit (FIU) has ordered a suspension of operations for Upbit, the country’s largest crypto exchange, due to alleged violations of Anti-Money Laundering (AML) policies.
Local news outlet Maeil Business Newspaper reported that the penalty arose from Upbit’s failure to meet Know Your Customer (KYC) obligations.
The FIU notified Upbit of the suspension on Jan. 9, granting the exchange until next Monday to submit its response. A final decision regarding the penalty is expected the following day. If confirmed, Upbit may face restrictions on engaging with new customers for up to six months.
The regulatory scrutiny follows an on-site inspection by the FIU after Upbit submitted a business license renewal application in August.
The inspection reportedly uncovered approximately 700,000 instances of suspected violations related to KYC requirements. Under the Act of Reporting and Use of Specific Financial Information, Upbit could incur fines of up to 100 million Korean won (approximately $68,596) for each violation.
In addition to KYC issues, the FIU expressed concerns regarding Upbit’s services to overseas traders, which conflicts with local regulations that restrict domestic exchanges to verified South Korean citizens. Upbit’s business license expired in October last year, and its renewal application remains under review.
Established in 2017, Upbit holds a dominant position in South Korea’s crypto market, commanding around 70% market share.
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