On January 16, the largest cryptocurrency exchange platform in South Korea, Upbit, received a business suspension notice from the financial regulatory authority for violating the customer identification system (KYC) and failing to fulfill anti-money laundering obligations.
According to the financial industry news on the 16th, the Financial Intelligence Unit (FIU) of the Financial Services Commission issued a pre-notification of sanctions related to the violation of the 'Act on Reporting and Using Specified Financial Transaction Information' to Upbit on the 9th of this month, with the core content being a business suspension. If the sanction is ultimately determined, Upbit will be restricted from conducting new customer-related business during the business suspension period (up to 6 months).
However, the transactions of existing users can still be carried out normally. Currently, Upbit accounts for more than 70% of the trading volume in the virtual asset trading market in South Korea. Upbit can submit an opinion on this sanction to the FIU before the 20th of this month. The FIU will hold a sanction review meeting on the 21st after receiving Upbit's statement, and will ultimately determine the duration of the business suspension and other sanction matters.
Upbit is facing more severe sanctions than expected, which has attracted widespread attention from other virtual asset exchanges. This measure is interpreted as the determination of the financial authorities to rectify the illegal and unfair market order since the implementation of the 'Virtual Asset User Protection Act' in July last year. The virtual asset industry is also concerned about the impact of this sanction on Upbit's future business qualification renewal review. According to the regulations, the business qualification needs to be renewed every three years, and Upbit's qualification expired in October last year and is currently under review.
