Originally published on: November 15, 2024
South Korea’s popular cryptocurrency exchange, Upbit, is under investigation for reportedly breaching Know Your Customer (KYC) procedures on a massive scale as part of its local license renewal process.
According to reports from South Korea’s Financial Intelligence Unit (FIU) of the Financial Services Commission (FSC), Upbit is facing scrutiny for potential violations of KYC procedures, ranging from 500,000 to 600,000 cases. These alleged breaches were discovered during a review of Upbit’s business license renewal, which could impact the exchange’s operations.
In South Korea, cryptocurrency exchanges are required to implement strict KYC procedures and comply with Anti-Money Laundering (AML) protocols. Upbit, being one of the largest crypto exchanges in South Korea and globally, is now facing fines of 100 million Korean won ($71,500) per case for the alleged violations.
The FIU identified instances where Upbit reportedly allowed users to open accounts using IDs with blurred personal data, making it difficult for regulators to verify their identities. These violations could potentially lead to issues with Upbit’s license renewal and impact its standing in the crypto market.
This investigation into Upbit’s KYC practices comes on the heels of reports in October regarding potential anti-monopoly breaches involving the exchange. Upbit’s close relationship with K-Bank, a financial institution heavily exposed to crypto exchanges, has raised concerns among local authorities.
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