The South Korean cryptocurrency exchange, Upbit, is reportedly at risk of facing sanctions for failing to adhere to the nation’s stringent money laundering and Know Your Customer (KYC) regulations. The news comes from a recent report by local news outlet Maeil.
As one of South Korea’s leading cryptocurrency exchanges, Upbit was informed last week by the Financial Information Analysis Institute (FIU), a regulatory body under the Financial Services Commission, of the impending sanctions. Should these sanctions be confirmed, Upbit could face a suspension from engaging in new customer-related activities for a duration of up to six months.
This potential sanction would effectively impose restrictions on new customers from transferring virtual assets out of the exchange for a specified period, a move that Upbit has communicated to Maeil.
In response to the reported sanctions, CoinDesk has reached out to both Upbit and the Financial Services Commission for further comments. Meanwhile, Upbit is set to submit its counterarguments regarding the sanctions to the FIU by the 20th of this month. The FIU will then conduct a review of the submitted opinions before making a final decision.
This situation arises in the backdrop of a heightened initiative by South Korean regulators to closely scrutinize cryptocurrency exchanges. Following the upheaval caused by the collapse of the Terra stablecoin issuer in 2022, authorities have committed to intensifying their oversight of these platforms to ensure compliance with existing regulations and protect investors.
