Upbit Halts Operations After Regulator’s Order
South Korea’s Financial Intelligence Unit (KoFIU) has accused Upbit of money laundering and non-compliance with Know Your Customer (KYC) regulations, ordering the immediate suspension of the exchange’s operations.
On this page
According to Maeil Kyungjae, citing sources within KoFIU, Upbit has until January 20, 2025, to file its objections. The regulator will review the exchange’s response and hold hearings on the allegations before issuing a final decision on January 21.
The outcome will determine not only the duration of Upbit’s suspension but also its ability to renew its business license. Upbit’s license, which requires renewal every three years, expired in October 2024 and is currently under review.
If the allegations against Upbit are confirmed, the exchange could be barred from registering new clients for up to six months during the suspension period. Existing users would still be allowed to trade, albeit with volume restrictions. They might also be given a deadline to close their positions and withdraw funds. However, no final decisions will be made until January 21.
For context, Upbit is South Korea’s largest cryptocurrency exchange, accounting for more than 70% of the domestic virtual asset trading market.
This action is seen as a direct result of the Virtual Asset User Protection Act, which took effect on January 1, 2025, after its passage in July 2024. The law imposes fines of up to 100 million won per violation for companies that fail to comply with customer verification requirements.
In August 2024, South Korea’s Financial Intelligence Unit conducted an audit of Upbit as part of its license renewal process. During the inspection, investigators reportedly identified 700,000 instances where KYC procedures were not properly followed. This could result in potentially massive fines for the exchange.
KYC (Know Your Customer) is a mandatory process for verifying a customer’s identity, designed to prevent money laundering (AML) and the financing of terrorism (CTF).
Related: Crypto Regulations in South Korea: Key Features
The content on The Coinomist is for informational purposes only and should not be interpreted as financial advice. While we strive to provide accurate and up-to-date information, we do not guarantee the accuracy, completeness, or reliability of any content. Neither we accept liability for any errors or omissions in the information provided or for any financial losses incurred as a result of relying on this information. Actions based on this content are at your own risk. Always do your own research and consult a professional. See our Terms, Privacy Policy, and Disclaimers for more details.
Articles by this author
