South Korea’s Financial Intelligence Unit (FIU) has launched an investigation into cryptocurrency exchange Upbit over 600,000 suspected Know Your Customer (KYC) violations. The probe arises as the exchange seeks to renew its business license, potentially impacting its operations.
Monopoly and Regulatory Scrutiny
Local news reports state that Upbit is under investigation for accepting blurred ID submissions that did not meet South Korea’s stringent KYC standards. The FIU found over 500,000 instances of improper KYC procedures. These measures are crucial for preventing money laundering and terrorism financing. Additionally, the FSC's antitrust investigation prompted K-Bank to pull its $732 million IPO, which was set to be the largest since 2022.
Impact on the Crypto Market
With Upbit holding a dominant 70% market share in South Korea, its revenue is bolstered by its fee structure. The outcome of these investigations could significantly affect the country's cryptocurrency market.
Economic Implications
Experts are questioning whether South Korea's focus on cryptocurrency regulation might backfire on its economy. The investigations and their outcome will be crucial for the future of cryptocurrency regulation in South Korea.
The FIU's investigation into KYC violations at Upbit could shift the balance of power in South Korea’s cryptocurrency market. Regulatory scrutiny over the exchange and its fee structure also raises concerns about monopoly and economic stability.
