Sanctions against Upbit, the leading domestic virtual asset exchange for violating customer verification obligations, are expected to be confirmed next month.
According to the financial sector and financial authorities on the 21st, the Financial Intelligence Unit (FIU) will hold a sanctions deliberation committee today to review allegations of Upbit's violations of the customer verification system and anti-money laundering obligations. However, the committee will not make a final decision on sanctions today, but will discuss the severity of sanctions based on Upbit's explanation.
The specific results of the sanctions are expected to be released after the Lunar New Year holiday next month. The FIU is reported to have found hundreds of thousands of cases of violations of anti-money laundering obligations, including breaches of the customer verification system, after conducting on-site inspections related to Upbit's business license renewal application submitted since the end of August last year.
Financial institutions must verify the identity information of transaction customers using their identification, but Upbit has been identified as having inadequately processed this procedure. Upbit is also said to have violated obligations regarding restrictions on transactions with unreported operators. The FIU has previously notified Upbit of measures limiting new customers from transferring virtual assets for a certain period. Along with this, fines and severe disciplinary actions against employees are also expected to be imposed.
Previously, cryptocurrency exchange Hanbitco was fined 1.99 billion won for violations of the customer verification system, but the court canceled the penalty in December last year. There are also speculations that disciplinary actions against the Chief Executive Officer (CEO) could take place. An FIU official noted, "If there are grounds for employee sanctions or fines, they may be subject to sanctions."