Upbit Faces Scrutiny Over Alleged KYC Breaches Amid License Renewal
South Korea’s major cryptocurrency exchange, Upbit, is under scrutiny for allegedly violating Know Your Customer (KYC) protocols as part of its license renewal process.
Reports from local media suggest that the Financial Intelligence Unit (FIU), a division of South Korea’s Financial Services Commission (FSC), uncovered between 500,000 and 600,000 instances of possible KYC non-compliance during a review of the exchange’s operations.
The alleged breaches include allowing users to create accounts using identification documents with blurred personal information, such as obscured names and registration numbers, making proper verification impossible. South Korea’s regulations require strict KYC procedures, with exchanges mandated to only accept real-name bank accounts since 2018. The FSC has intensified oversight to enforce these rules, including mandatory exchange registration to ensure compliance with Anti-Money Laundering (AML) laws.
If the allegations are proven, Upbit could face substantial penalties, with fines reportedly reaching 100 million Korean won ($71,500) per violation. Moreover, the controversy may jeopardize the renewal of the exchange’s business license, potentially disrupting its operations. Upbit, established in 2017, is one of the country’s largest cryptocurrency platforms, handling over $2 billion in daily trading volume.
READ MORE: Goldman Sachs Expands Bitcoin ETF Holdings to $718M Despite Past Criticism
This scrutiny follows recent investigations into Upbit’s potential anti-monopoly violations, particularly concerning its relationship with K-Bank, a financial institution heavily reliant on crypto-related deposits. Local authorities have expressed concerns that up to 70% of K-Bank’s deposits come from crypto activities. In October, K-Bank withdrew its planned $732 million IPO, citing concerns about overvaluation and its close ties to the cryptocurrency sector.
The mounting regulatory pressure highlights the increasing vigilance of South Korean authorities in monitoring the crypto industry, signaling that even the most established players are not exempt from stringent compliance demands.
Alexander Stefanov
Reporter at CoinsPress
Alex is an experienced finance journalist and a cryptocurrency and blockchain enthusiast. With over five years of experience covering the industry, he deeply understands the complex and constantly evolving world of digital assets. His insightful and thought-provoking articles provide readers with a clear picture of the latest developments and trends in the market. His passionate approach allows him to break down complex ideas into accessible and insightful content. Follow up on his content to be up to date with the most important trends and topics - stay ahead of the curve with CoinsPress.
