South Korea’s financial regulators have taken a significant step by notifying upbit 
upbit – [email protected] Centralised Exchange , the country’s largest virtual asset exchange, of a possible suspension of its business operations. The move comes amid allegations that the platform failed to meet anti-money laundering (AML) standards and violated customer identification (KYC) requirements.
This decision could have a major impact on the domestic crypto market.
Sanctions and Allegations: The Key Issues
The Financial Intelligence Unit (FIU) of the Financial Services Commission (FSC) issued a preliminary notice of sanctions to Upbit on January 9. The charges involve breaches of the Specific Financial Transaction Information Act, which enforces strict AML and KYC compliance.
If the sanctions are imposed, Upbit will be prohibited from onboarding new customers for up to six months. During this period, new users will also be restricted from transferring virtual assets outside the platform.
However, existing users will still be able to trade, allowing the platform to continue some operations. Given that Upbit handles over 70% of South Korea’s crypto trading volume, the potential consequences are considerable.
Next Steps: Upbit’s Response and the FIU Hearing
Upbit has until January 20 to provide a formal response to the sanctions. The FIU will then hold a hearing on January 21 to finalize its decision, including the length of the suspension. This gives the exchange a short window to defend its practices and potentially reduce the severity of the penalties.
Broader Impact on the Crypto Industry
These sanctions come on the heels of South Korea’s Virtual Asset User Protection Act, introduced in July, which emphasizes curbing illegal and unethical practices in the virtual asset industry. The strict action against Upbit has sparked concern among ot