- South Korean authorities ordered Upbit to suspend business operations for violating KYC and AML regulations.
- FIU in South Korea found over 700,000 incidents where the exchange did not comply with KYC laws.
South Korean financial regulation, Financial Intelligence Unit (FIU) ordered Upbit exchange to suspend its business operations for violating KYC and AML regulations. Upbit is the top crypto exchange in South Korea and top 5th crypto exchange across the world, in terms of trading volume.
Being one of the largest crypto exchanges, Upbit accounts for around 70% of the total virtual asset trading market in South Korea. With the FIU sanctions came to light, it might affect Upbit’s reputation as the top crypto exchange in South Korea.
As per the local news report from Maeil Business Newspaper, Financial Intelligence Unit of South Korea informed Upbit in advance regarding sanctions around its suspension of business for violating “Specific Financial Transaction Information Act.” Upbit has time until next Monday to submit its opinion regarding the same.
In case the decision is confirmed, Upbit might have to stop its business operations from new customers for a suspension duration of 6 months. In particular, customers will not be able to transfer virtual assets outside the exchange for this period of time. However, these restrictions do not apply to existing customers. They can continue to use Upbit exchange for trading and transfer of funds.
Over 700,000 Cases Found Without Proper KYC Implementation
Upbit submitted business license renewal applications to FIU previously. When the financial regulator started inspections of these applications, it found more than 700,000 incidents where KYC was not implemented. As per Special Financial Transactions Act, Upbit might face a fine of up to 100 million won.
The entire virtual asset industry is interested to know how this might affect future operations of crypto exchange services in the country. On the other hand, another big question is whether Upbit’s business license renewal will get approved or not. Nonetheless, having stringent rules and regulations in place is a good thing for crypto exchanges amidst increasing cybercrimes.
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