Upbit, South Korea’s largest cryptocurrency exchange, has been hit with a three-month suspension on new user transfers following regulatory violations, according to a report from JoongAng Ilbo. The Financial Services Commission (FSC) imposed the penalty after finding multiple compliance failures related to customer verification, trading restrictions, and suspicious transaction reporting.
Regulatory Crackdown on Upbit
The FSC’s decision follows a series of regulatory missteps by Upbit, prompting authorities to take strict action against the exchange. Alongside the suspension, Dunamu’s CEO (Upbit’s parent company) received a warning, and nine staff members, including Upbit’s compliance officer, were dismissed.
The regulator cited violations of Know Your Customer (KYC) rules, trading oversight failures, and failure to report suspicious transactions as the key reasons for the enforcement action.
Dunamu Responds to the Sanctions
Dunamu has acknowledged the regulatory decision and stated that it is “carefully discussing future steps” to address the situation. The company reassured users that while new user transfers are suspended, the platform remains fully operational for existing customers.
Upbit’s Ongoing Regulatory Troubles
This penalty comes amid ongoing scrutiny of Upbit’s operations. Earlier investigations uncovered over 700,000 KYC violations, raising concerns about compliance lapses. Additionally, Upbit agreed to pay the largest compensation in its history after system failures during South Korea’s December 2024 martial law declaration, which led to major market disruptions and unrest.
What’s Next for Upbit?
Despite controlling over 70% of South Korea’s crypto market, Upbit now faces increased regulatory pressure that could affect its long-term operations. With the FSC tightening enforcement across the sector, crypto exchanges in South Korea may need to reevaluate their compliance frameworks to avoid further penalties.
For now, new users will have to wait until Upbit resolves its regulatory challenges, while the exchange works to address concerns raised by authorities.
