Crypto Exchange Upbit May Face Sanctions in South Korea

Upbit, one of South Korea’s largest exchanges, may face sanctions for non-compliance with money laundering and know your customer (KYC) obligations.

According to a report from local news site Maeil, Upbit was notified by the Financial Information Analysis Institute (FIU) under the Financial Services Commission last week of the potential sanctions.

If the decision is confirmed, Upbit could be restricted from new customer-related business for up to six months.

Restrictions on New Customers

The decision would “essentially restrict new customers from transferring virtual assets outside the exchange for a certain period of time,” Upbit told Maeil.

Regulatory Backdrop

South Korean authorities vowed to look more closely at exchanges in 2022 following the collapse of stablecoin issuer Terra, calling regulators to supervise them thoroughly.

Next Steps

Upbit will submit an opinion regarding the sanctions to the FIU by the 20th, and the FIU will then review the sanctions.

Conclusion

This potential sanction highlights the importance of compliance with anti-money laundering and know your customer (KYC) regulations in the cryptocurrency industry. As the regulatory landscape continues to evolve, exchanges must ensure they meet the necessary standards to maintain a safe and secure environment for their customers.

FAQs

• What is the potential sanction imposed on Upbit? The potential sanction would restrict new customer-related business for up to six months.
• What prompted the potential sanction? Upbit’s non-compliance with money laundering and know your customer (KYC) obligations.
• What is the background of the regulatory action? South Korean authorities vowed to look more closely at exchanges in 2022 following the collapse of stablecoin issuer Terra, calling regulators to supervise them thoroughly.