Upbit, one of South Korea's largest crypto exchanges, has been barred from facilitating new user transfers for three months due to violations of the country's financial regulations.
Reasons for Suspension
South Korea's Financial Services Commission imposed the restriction on Upbit for failing to comply with trading restrictions, customer verification duties, and obligations to report suspicious transactions. Alongside the suspension, the regulator issued warnings to the CEO of Dunamu, Upbit's parent company, and removed nine staff members, including the compliance officer.
Upbit's Response and Measures
Dunamu acknowledged the necessity of regulatory actions, stating that it is "carefully discussing future steps." They assured that while new user transfers are restricted, services for existing users remain unaffected.
Context and Past Incidents
Previously, Upbit came under scrutiny for over 700,000 KYC violations discovered during a review of its business license renewal. In December 2024, during a period of martial law and unrest in South Korea, the exchange agreed to provide the largest-ever compensation for system failures.
The measures against Upbit illustrate a heightened regulatory focus on compliance with local financial norms within the cryptocurrency industry.
