The Financial Intelligence Unit (FIU) sanctioned Dunamu, Upbit’s parent company, for conducting transactions with unregistered virtual asset businesses. Upbit also failed to follow proper customer verification procedures and did not report suspicious transactions. Along with the suspension, the exchange faces financial penalties and personnel actions.
Upbit has acknowledged the violations and promised to strengthen compliance measures. The company assured users that it would improve transaction management and monitor its system to prevent future issues.
This crackdown is part of South Korea’s broader effort to tighten regulations on the crypto industry. Authorities launched an antitrust investigation into Upbit five months ago, examining whether it engaged in monopolistic practices. Additionally, last month, Upbit faced allegations of 700,000 Know Your Customer (KYC) violations, following concerns about 600,000 potential breaches flagged earlier.
Despite regulatory challenges, Upbit remains a dominant player in the market. It was the first Korean exchange to issue a public disclosure under the Virtual Asset User Protection Act seven months ago. Two years ago, it surpassed Coinbase and OKX in trading volumes.
As South Korea prepares to introduce stricter crypto regulations in 2025, Upbit will need to adapt to maintain its market position.
