South Korea investigates Upbit for mass KYC violations
Investigation against Upbit
South Korean cryptocurrency exchange Upbit is under investigation for alleged mass violations of the "know your customer" (KYC) rule. The platform faces a fine of $71,500 per incident.
According to the local Maeil Business Newspaper, the Financial Services Commission (FSC) discovered between 500,000 and 600,000 potential violations of KYC procedures during the renewal of Upbit's business license.
Upbit is accused of allowing users to open accounts using IDs with blurred personal information, such as names and registration numbers, making it difficult for regulators to verify identities.
Due to these alleged breaches, Upbit risks fines of $71,500 per case and potential challenges in renewing its business license in South Korea.
Cryptocurrency exchange regulations in South Korea
Cryptocurrency exchanges and virtual asset service providers (VASPs) in South Korea are required to comply with stringent KYC procedures. These regulations aim to combat money laundering and financing of illegal activities, mandating user identity verification and linking accounts to real bank accounts.
In January 2018, South Korea began regulating the crypto market by restricting trading to verified real-name bank accounts. Subsequently, stricter rules were introduced, including mandatory registration of all crypto exchanges with the FSC to ensure compliance with KYC and anti-money laundering (AML) protocols.
Six months ago, Upbit became the leader in the South Korean cryptocurrency market.
