South Korea’s Financial Services Commission (FSC) has identified significant lapses in know-your-customer (KYC) compliance at the country’s largest cryptocurrency exchange, Upbit. During the exchange’s license renewal review, 500,000 to 600,000 instances of bypassed identification and verification processes were uncovered.
Identified Violations
According to a local report, some accounts were opened using blurred identification cards, while others lacked adequate verification altogether. Violations of this nature could result in fines of up to 100 million won ($71,740) and complicate Upbit’s license renewal process.
Implications for Upbit
Despite its strong market position, ranking fifth globally on CoinMarketCap’s spot exchange list with over $7.7 billion in trading volume in the past 24 hours and $48.2 billion in October, Upbit now faces increased scrutiny.
Regulators' Reaction
FSC Chair Kim Byung-hwan has pledged to investigate the monopolistic structure of South Korea’s crypto market, which is largely dominated by Upbit. This latest KYC compliance issue may intensify regulatory oversight and challenge the exchange’s operations.
The discovered lapses in Upbit's user identification processes could significantly impact its licensing prospects and lead to increased scrutiny from regulators.
