Upbit Faces 3-Month Partial Suspension

Upbit Faces Three-Month Partial Suspension for Regulatory Violations

South Korea's Upbit, a major cryptocurrency exchange, is facing a three-month partial suspension due to violations of industry regulations. This follows an antitrust investigation launched by South Korean authorities.

Key Violations and Sanctions

Dunamu, the parent company of Upbit, was sanctioned for several violations, including:

• Transactions with unregistered virtual asset businesses.
• Failure to adhere to proper customer verification (KYC) procedures.
• Failure to report suspicious transactions.

The sanctions include a three-month ban on new users transferring virtual assets (March 7, 2025 - June 6, 2025). Existing users can continue trading without restriction. Additional penalties include personnel actions and financial fines.

Upbit's Response and Ongoing Regulatory Scrutiny

Upbit acknowledged the violations in an official statement, committing to corrective actions and improved compliance. The exchange expressed regret for any inconvenience caused to users. While the suspension impacts new user asset transfers, existing users can trade normally. The sanctions remain subject to regulatory procedures and potential changes.

South Korea's Tightening Regulatory Grip

This action is part of a broader effort by South Korean authorities to strengthen regulatory oversight of its cryptocurrency sector. The recent penalties follow increased scrutiny on Upbit including:

• A five-month-long antitrust investigation into monopolistic practices.
• A previous temporary suspension due to alleged 700,000 KYC violations.

South Korea plans to introduce the second part of its crypto regulatory framework in H2 2025, reflecting the country's significant cryptocurrency adoption (over 30% of the population invested in crypto as of November 2024).

Codeum's Note: These events highlight the crucial need for robust KYC/AML compliance and secure practices within the cryptocurrency industry. Codeum provides comprehensive solutions for blockchain security, including KYC verification and smart contract audits, to help exchanges and businesses navigate the evolving regulatory landscape and mitigate risks.

While Upbit navigates these challenges, its past performance demonstrates its significant market position in South Korea. The exchange's commitment to compliance will determine its future success in this increasingly regulated market.