South Korean cryptocurrency exchange Upbit has been hit with a partial business suspension by the country’s Financial Intelligence Unit (FIU), temporarily preventing new customers from conducting crypto deposits and withdrawals.
According to a report by Korea Daily News on February 25, the FIU imposed a three-month restriction on Upbit’s new customer transactions due to violations of South Korean regulations, including facilitating transactions with unregistered crypto asset service providers. A disciplinary warning was issued to the CEO of Dunamu, the operator of Upbit, and sanctions were enforced on nine employees, including the termination of the compliance officer.
Following on-site inspections conducted by authorities in 2024, Upbit was found to be non-compliant with certain regulatory requirements. In response to the FIU’s decision, the exchange issued a public statement acknowledging the sanctions and apologizing for any inconvenience caused to its users.
Upbit stated that it has already taken corrective measures to address regulatory concerns but noted that some aspects of the sanctions might be subject to revision.
“The sanctions imposed this time may be subject to change through procedures in accordance with relevant regulations,”
the company said, adding that if the restrictions are lifted or modified, new customers will regain full access to its services.
While the suspension affects new users, Upbit reassured its existing customers that they can continue using all platform services without limitations. The exchange also promised to provide further updates should any changes be made to the FIU’s decision.
Notably, South Korean authorities have taken regulatory action against Upbit, citing potential penalties for non-compliance with anti-money laundering (AML) regulations and issues with the KYC system. Upbit, which accounts for over 70% of the country’s crypto trading volume, described the sanctions as restrictions on new customer transactions involving external transfers. Earlier warnings indicated failures in verifying client identities, with regulators highlighting issues in around 600,000 cases due to blurred identification documents and improperly verified details.
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