- South Korean authorities may suspend Upbit for up to six months over alleged KYC and anti-money laundering violations.
- Investigations into Upbit include monopolistic practices and a 2019 theft of 342,000 ETH linked to North Korean hackers.
The South Korean authorities have issued a suspension notice against Upbit, the country’s largest crypto exchange, for suspected anti-money laundering (AML) infractions relating to Know Your Customer (KYC) compliance, according to Naver.
Although current users will still be able to make regular transactions, this legislative action may cause Upbit’s new client registrations to be suspended for up to six months. The last say on the suspension is likely to be given on January 21, 2025.
Upbit Faces Growing Pressure from Regulatory Investigations
The accusations against Upbit result from a late August 2024 thorough investigation started by the Financial Intelligence Unit (FIU) of South Korea. The FIU found throughout the audit between 500,000 and 600,000 possible KYC rule violations.
These results draw attention to important flaws in the user verification systems of the exchange, which authorities contend would support illegal activity like money laundering.
Should she be found guilty, Upbit could also be subject to pecuniary fines ranging from up to 100 million won (about $75,000) for every infraction, therefore augmenting the weight of the regulatory scrutiny.
Apart from these claims, Upbit has been under continuous parliamentary scrutiny in South Korea, with an emphasis on its overwhelming market share.
Legislators have expressed worries about possible monopolistic activities and the general impact of the trade on the local crypto market. These changes coincide with South Korea’s increasing regulatory approach for digital assets, meant to guarantee more user security and openness.
Concurrent with this political unrest in South Korea has affected the bitcoin industry. President Yoon Suk Yeol’s unexpected declaration of martial law in December 2024 set traders on a frenzy that resulted in a notable 30% decline in the value of Bitcoin relative to the Korean won on Upbit.
Though the situation calmed down hours after martial law was revoked, the event exposed the explosive junction of politics and the crypto market.
On the other hand, CNF previously reported a significant security issue connected to Upbit whereby North Korean hackers stole 342,000 ETH in 2019 and laundered the money via exchanges across more than 51 countries.
Only 4.8 BTC was recovered from this billion-dollar crime despite cooperative investigations by South Korea and the FBI.
