South Korea's Financial Intelligence Unit (FIU) has imposed a three-month business suspension on Upbit due to violations concerning transactions with unregistered virtual asset service providers. This decision was publicly announced on the FIU’s website on February 25.
According to a report from the FIU, Upbit engaged in 44,948 virtual asset transactions with 19 unregistered virtual asset service providers between August 28, 2022, and August 23, 2024. This activity violated the Act on Reporting and Using Specified Financial Transaction Information. The report also indicates that Upbit failed to adequately verify customer identities, allowing over nine million customer re-verifications without valid identification and processing transactions for users with incomplete or incorrect address details. Furthermore, Upbit did not monitor or report suspicious transactions, including those involving high-risk accounts and large-volume cryptocurrency trades, raising concerns about potential money laundering activities.
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Founded in 2012 and headquartered in Seoul, South Korea, Dunamu Inc. is a fintech company specializing in blockchain and financial services. It operates Upbit, a cryptocurrency exchange launched in 2017 that has since become one of South Korea’s largest by trading volume. Upbit provides a platform for trading various cryptocurrencies and serves both retail and institutional investors.
The Korea Financial Intelligence Unit (KoFIU), established on November 28, 2001, operates under the Financial Services Commission (FSC) as South Korea’s main agency for anti-money laundering (AML) and countering the financing of terrorism (CFT). KoFIU is responsible for collecting, analyzing, and distributing financial intelligence related to suspicious transactions and large cash movements to law enforcement agencies.