South Korean regulatory agency has issued a business suspension order to Upbit, but existing user transactions can still proceed as usual

BlockBeats News, January 16th, South Korea's largest domestic cryptocurrency exchange Upbit received a business suspension notice from the financial regulatory agency due to violations of the Know Your Customer (KYC) system and failure to fulfill anti-money laundering obligations.

According to Financial News on the 16th, the Financial Intelligence Unit (FIU) of the Financial Services Commission issued a preliminary sanction notice to Upbit on the 9th of this month regarding violations of the Specific Financial Transactions Act, with the key content being a business suspension. If this penalty is finally confirmed, Upbit will be restricted from conducting new customer-related business during the business suspension period (up to 6 months).

However, existing user transactions can still proceed normally. Currently, Upbit accounts for over 70% of the trading volume in the South Korean virtual asset trading market. Upbit can submit a written opinion on this penalty to the FIU by the 20th of this month. After receiving Upbit's statement, the FIU will hold a sanction review meeting on the 21st to finally determine the duration of the business suspension and other sanction matters.

Upbit is facing more severe sanctions than expected, attracting widespread attention from other virtual asset exchanges. This measure is interpreted as a reflection of the financial authorities' determination to rectify illegal and unfair market practices since the implementation of the Virtual Asset User Protection Act in July last year. The virtual asset industry is also concerned about the impact of this sanction on Upbit's future business qualification renewal review. According to regulations, business qualifications need to be renewed every three years, and Upbit's qualification expired in October of last year and is currently under review.