365Crypto
Government Sanctions Upbit
South Korea’s Financial Intelligence Unit (FIU) has imposed a three-month ban on new customer transactions for Upbit, the country’s largest crypto exchange. The restriction, announced on Feb. 25, prevents new users from depositing or withdrawing crypto assets.
Regulatory Violations
The FIU cited violations of South Korean regulations that prohibit crypto exchanges from dealing with unregistered digital asset service providers. The decision follows on-site inspections in 2024, which flagged issues in Upbit’s compliance practices.
Upbit Responds
Upbit acknowledged the sanctions on its website, apologizing for any inconvenience. The exchange emphasized that the restrictions could change following further discussions with regulators. Existing customers remain unaffected and can continue using all services.
Trading Volume Decline
The ban comes amid reports of potential Know Your Customer (KYC) violations, with the FIU previously identifying 600,000 breaches in Upbit’s verification process. Since January, Upbit’s daily trading volume has dropped by 70%, now totaling $4.6 billion.
¹ Financial Intelligence Unit (FIU) – A government body overseeing financial compliance and anti-money laundering efforts.
² Know Your Customer (KYC) – A process used by financial institutions to verify customer identities and prevent fraud.
