Upbit Faces Suspension Over Regulatory Violations

Upbit, one of the largest South Korean cryptocurrency exchanges, has been hit with a three-month suspension on new user transfers due to violations of multiple financial regulations. The Financial Services Commission imposed the penalty following Upbit’s failure to comply with trading restrictions, customer verification duties, and obligations to report suspicious transactions.

Regulatory Action and Penalties

Alongside the suspension, the Korean financial watchdog issued a warning to Dunamu’s CEO, Upbit’s parent company. The company also dismissed nine staff members, including the compliance officer, due to the regulatory breaches. Dunamu acknowledged the intentions behind the regulatory action, stating that it is “carefully discussing future steps.”

The suspension affects new user transfers, but the service for existing users remains unaffected. Dunamu reassured users that they can continue to use the platform without disruptions.

Background on Upbit’s Regulatory Issues

Upbit, which controls over 70% of the local crypto market, has faced scrutiny due to over 700,000 Know-Your-Customer (KYC) violations discovered during a review of its business license renewal. The exchange also agreed to provide a significant payout to users following system failures triggered by the martial law declaration in South Korea.

This payout marked the largest ever made by the exchange, highlighting the impact of regulatory actions on cryptocurrency exchanges. The incident also underscores the importance of compliance with financial regulations and the need for exchanges to prioritize user protection and verification.

For the latest updates on cryptocurrency news and regulations, visit Global Crypto News.

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