- South Korea investigates Upbit for suspected large-scale KYC violations involving 500,000 to 600,000 unrecognizable documents.
- Regulatory scrutiny could impact Upbit’s license renewal and highlight ties with K-Bank under anti-monopoly investigation.
Upbit, South Korea’s largest crypto exchange, is under investigation by the authorities over allegations of large-scale violations of Know Your Customer (KYC) requirements, according to MK.
Part of the Financial Services Commission (FSC), the Financial Intelligence Unit (FIU) found during a recent inquiry between 500,000 and 600,000 examples of dubious KYC documentation. These allegedly hazy or unreadable records begged questions regarding their possible use for money laundering or other criminal activities.
Upbit Regulatory Challenges Amid License Renewal and K-Bank Ties
Given that this inquiry falls during Upbit’s continuous license renewal procedure, timing is very important. Regulatory rules state that any breach of KYC requirements can result in hefty fines ranging from 100 million won (about $71,500) per offense.
Given the scope of the claimed infractions, Upbit might be subject to large financial fines, therefore compromising its operations.
Furthermore, the results of this research can affect the capacity of the exchange to keep its operational license, thereby posing issues about the future of one of the most well-known crypto platforms in South Korea.
Upbit is dealing with other regulatory issues besides these KYC transgressions. Particularly with regard to its tight relations to K-Bank, the FSC declared in October 2024 its intention to look at the exchange for claimed anti-monopoly crimes.
Major financial company K-Bank allegedly has excessive exposure to crypto assets via Upbit, which makes authorities wonder about the equity and openness of their connection.
Upbit has stayed silent in front of these difficulties, providing no formal comments on the continuous inquiries. The lack of public reaction just heightens the confusion about the trade and its practices.
Still, its recent market activity has attracted notice for a different reason. Recently, CNF reported that Upbit listed Pepe Coin, a move that greatly raised the memecoin price, together with Coinbase and Robinhood.