Upbit at Risk of Historic $131.5 Billion Fine: South Korean Lawmaker Drops Bombshell
South Korea’s largest cryptocurrency exchange, Upbit, is under threat of a historic fine amounting to an astonishing $131.5 billion due to alleged failures in verifying customer identities and other compliance breaches. This bombshell revelation has sent shockwaves throughout the crypto industry.
According to reports, South Korean lawmaker Min Byung-deok disclosed that a comprehensive inspection by the Financial Intelligence Unit (FIU) uncovered a staggering 9.57 million Know-Your-Customer (KYC) violations on Upbit’s part. The magnitude of this fine, if imposed, could have far-reaching implications for South Korea’s crypto ecosystem.
The initial sanctions imposed in February included a ban on new customer deposits and withdrawals, effectively restricting fresh inflows to the exchange. Existing users can still engage in trading activities, but these restrictions raise concerns about potential chaos in the region. With its dominance in the market, an extended suspension or hefty fine amount could significantly impact local traders and liquidity.
Despite these challenges, Upbit has maintained a reputation for compliance by registering under South Korea’s revised regulations in 2021. Following the sanctions, the exchange reaffirmed its commitment to strengthening anti-money laundering efforts and internal controls.
The regulatory pressure intensifies as authorities step up enforcement under the new Virtual Asset User Protection Act implemented in July 2024. Inspections have already been expanded to major exchanges like Bithumb, Korbit, GOPAX, and Coinone, signifying that no significant player is exempt from oversight.
As Dunamu continues negotiations with the Financial Services Commission (FSC), the final outcome will determine Upbit’s future.
Source: www.coinspeaker.com