South Korea's largest cryptocurrency exchange, Upbit, is under scrutiny for significant customer identification (KYC) violations.
Major Flaws Detected in Identification
Since August, the FIU has conducted field examinations as part of Upbit’s license renewal application. These investigations revealed that the cryptocurrency exchange did not implement its KYC processes correctly. Identification documents submitted by users often contained blurred names or registration numbers, yet accounts were approved and opened. This leaves room for potential involvement in criminal activities. FIU officials continue to thoroughly investigate each suspicious case.
Potential Fines and License Revocation
According to South Korea’s Special Financial Information Act, cryptocurrency exchanges and platforms must renew their licenses every three years. KYC violations can jeopardize license renewal. Additionally, violations can result in fines of up to 1 billion Korean won per occurrence. Experts suggest that the high number of violations could significantly increase potential fines.
Impact on Cryptocurrency Market
Experts warn that this situation could have a substantial impact on the cryptocurrency market. The FIU’s final decision, based on detailed investigations, will be crucial for both Upbit and the future of the cryptocurrency sector.
The investigation into Upbit's KYC violations raises critical concerns that could affect the future of the cryptocurrency industry in the region.
