South Korea's Financial Intelligence Unit has uncovered numerous violations in customer verification procedures at Upbit during its license renewal review.
KYC Issues at Upbit
Reports indicate the FIU found between 500,000 and 600,000 potential cases of inadequate KYC compliance at Upbit, raising concerns about the exchange’s ability to renew its license.
FIU Investigation
The FIU began on-site inspections of Upbit in late August. The authority discovered many instances where KYC protocols were not properly followed. These protocols, mandated by the Special Financial Transaction Information Act, require virtual asset service providers to verify customer identities to prevent money laundering and terrorism financing. Among the issues cited, some accounts were reportedly opened with unclear identification documents, including blurred or incomplete names.
Impact on Upbit's License
Extended review could impact Upbit’s license, raising industry-wide compliance concerns. Potential fines for each KYC violation could reach up to 100 million won.
The identified violations could affect not just Upbit, but the entire industry, highlighting the importance of strict KYC compliance.
