YEREVAN (CoinChapter.com) — South Korea’s Financial Intelligence Unit (FIU) has issued a three-month restriction on Upbit, blocking new customers from depositing or withdrawing cryptocurrencies. The decision, announced on Feb. 25, cites violations of regulations prohibiting transactions with unregistered crypto asset service providers (CASPs).
South Korea FIU Sanctions Dunamu—Upbit Parent Company Under Regulatory Scrutiny. Source: FIUThe FIU’s official disclosure named Dunamu, Upbit’s parent company, in the enforcement action. The exchange responded on its website, acknowledging the FIU-imposed restrictions and apologizing for the inconvenience caused to users.
Upbit Acknowledges FIU’s Sanctions, Mentions Possible Revisions
Upbit confirmed that new customers cannot transfer crypto assets due to findings from 2024 on-site inspections by regulators. The exchange stated that it had already taken corrective measures but noted that some regulatory details might not have been fully considered.
“The sanctions imposed this time may be subject to change through procedures in accordance with relevant regulations, and if the effect of the relevant measures is suspended or terminated, new members will also be able to use Upbit’s services without restrictions,”
Upbit stated.
The exchange said it would provide further updates if discussions with regulators lead to any changes in the FIU-imposed restrictions.
Existing Customers Can Still Access All Services
Despite the three-month suspension on new customer transactions, Upbit clarified that existing users can still use its platform for crypto trading, deposits, and withdrawals. The exchange did not specify whether it would challenge the FIU’s sanctions or seek an appeal.
Upbit said it is complying with regulatory requirements and working with authorities to address concerns. The company assured users that ongoing operations remain unaffected.
FIU Investigated Upbit for KYC Violations
The FIU’s restrictions follow previous reports from January 2024, when regulators notified Upbit of potential penalties for Know Your Customer (KYC) violations. Authorities first reported alleged KYC breaches in November 2024, identifying 600,000 cases of non-compliance in the exchange’s client verification process.
The FIU’s enforcement action aligns with the South Korean government’s broader push for strict compliance among crypto exchanges. The agency has increased oversight on crypto asset platforms to enforce customer identification regulations.
Upbit Trading Volume Drops 70% Since January
Since the start of 2024, Upbit’s daily trading volumes have fallen by 70%, dropping to $4.6 billion at the time of writing. The decline follows concerns over regulatory issues and the impact of the FIU-imposed sanctions.
Founded in 2017, Upbit is the largest centralized crypto exchange in South Korea and ranks 23rd globally by trust score, according to CoinGecko. The platform remains a key player in the South Korean crypto market, despite increased regulatory scrutiny.
Top South Korean Crypto Exchanges Ranked by Trust Score—Upbit Leads Market. Source: CoinGeckoThe FIU’s restrictions on Upbit reflect South Korea’s strict enforcement of crypto exchange regulations. The outcome of Upbit’s discussions with regulators could determine whether these measures remain in place or change in the future.
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