Upbit crypto exchange receives suspension notice in South Korea

Upbit, one of the largest cryptocurrency exchanges in South Korea, has reportedly received a suspension notice for alleged Know Your Customer (KYC) violations.The Financial Intelligence Unit (FIU) of South Korea’s Financial Services Commission (FSC) has notified Upbit of possible punitive measures related to alleged KYC violations, according to a Jan. 16 report on Naver.As part of the measures, the authorities seek to suspend new user registrations on Upbit for six months, with existing users not being affected.According to the report, Upbit can submit its feedback on the restrictions to the FIU by Jan. 20. The authority plans to make a final decision on the penalty on Jan. 21.Upbit is one of the largest South Korean crypto exchanges by volumesSouth Korean authorities first reported on Upbit’s alleged KYC violations in November 2024, with the FIU identifying at least 500,000 to 600,000 breaches in its client identification process.The authority spotted Upbit’s KYC violations while reviewing the renewal of the company’s business license, potentially affecting the exchange’s operations.Founded in 2017, Upbit is one of the largest crypto exchanges in South Korea and globally, trading $7.5 billion daily, according to CoinGecko.South Korea’s KYC fines are up to $68,600 per caseAccording to South Korea’s Special Financial Transactions Act, the penalties for KYC violations are up to 100 million Korean won (around $68,600) per case.As Upbit was found to have at least 500,000 KYC breaches, the violations could potentially cost the company at least $34.3 billion.Additionally, the Special Act on Financial Transactions stipulates local crypto companies are restricted from conducting transactions with unregistered crypto service providers.According to Naver, Upbit has also violated this provision while conducting business with unregistered crypto service operators.Cointelegraph approached the FSC and Upbit for a comment regarding the suspension notice but did not receive a response at the time of publication.The news comes amid South Korean authorities progressing with a long-running court case involving Lee Jung-hoon, the former chair of major local crypto exchange Bithumb.On Jan. 16, Lee was reportedly acquitted in an appeal trial related to a large-scale customer data breach on Bithumb, which occurred in 2017 and affected 31,000 user accounts.