South Korea’s Upbit faces potential fines of up to $131 billion for KYC and compliance failures, raising concerns across the crypto industry.
By Parth Dubey
Editor Hamza Tariq
Updated
2 mins read
South Korea’s largest cryptocurrency exchange, Upbit, could face fines up to 183 trillion won ($131.5 billion) for breaches of know-your-customer (KYC) requirements and related compliance rules.
South Korean lawmaker Min Byung-deok’s office, the Financial Intelligence Unit (FIU) found 9.57 million violations during a comprehensive inspection of Upbit’s operator, Dunamu, earlier this year.
Most of these violations relate to failures in verifying customer identities. A local report suggests that based on penalties levied in domestic banking cases, the fine could realistically fall between 45 trillion and 95 trillion won.
In February 2025, the FIU imposed initial sanctions, including a ban on new customer deposits and withdrawals, effectively restricting fresh crypto inflows to the exchange. Existing customers can still trade, but the restrictions have raised alarms about potential chaos in the region.
Upbit currently commands more than 80% of South Korea’s crypto market. It is the region’s most popular digital asset trading platform with almost all top crypto coins. A prolonged suspension or high fine amount could impact local crypto traders and the liquidity landscape.
Currently, the FIU has enforced a partial three-month suspension of certain Upbit services and issued dismissals and reprimands to one executive and nine employees. However, the fine has not yet been officially imposed.
Despite these challenges, Upbit has maintained a reputation for compliance, being the first exchange to register under South Korea’s revised regulations in 2021.
Following the sanctions in February, the exchange reaffirmed its commitment to strengthening anti-money laundering efforts and internal controls.
The crackdown on Upbit comes as South Korea tightens its grip on crypto regulation. Following the implementation of the Virtual Asset User Protection Act in July 2024, regulators have expanded inspections to several major exchanges like Bithumb, Korbit, GOPAX, and Coinone.
This signals that no major player is immune from oversight as authorities step up enforcement under the new framework. As Dunamu continues to negotiate with the Financial Services Commission (FSC), the final outcome will determine Upbit’s fate.
It is worth noting that South Korea is currently finalizing its crypto regulatory framework after several official discussions. The regulators are aiming to release the first draft as soon as by the year-end.
Disclaimer: Coinspeaker is committed to providing unbiased and transparent reporting. This article aims to deliver accurate and timely information but should not be taken as financial or investment advice. Since market conditions can change rapidly, we encourage you to verify information on your own and consult with a professional before making any decisions based on this content.
A crypto journalist with over 5 years of experience in the industry, Parth has worked with major media outlets in the crypto and finance world, gathering experience and expertise in the space after surviving bear and bull markets over the years. Parth is also an author of 4 self-published books.