Dunamu, the operator of the domestic virtual asset exchange Upbit, said on the 2nd that it proactively detected money-laundering risks linked to the Huione exchange in Cambodia and took the lead in crime prevention by becoming the first among domestic exchanges to block coin transfers (deposits and withdrawals).
In Mar., Upbit detected the possibility of laundering criminal funds through the Huione exchange via its own monitoring and strengthened its surveillance system. In the process, it froze funds and carried out enhanced customer due diligence and suspicious transaction reports for 259 users who transferred or attempted to transfer virtual assets between Huione and Upbit. Of these, it notified 205 users who refused to explain the source of funds or gave insufficient answers of termination in Sep.
Upbit's tough action came two months ahead of the U.S. Financial Crimes Enforcement Network (FinCEN) designating Huione as a money-laundering concern, a preemptive response. In particular, Upbit's swift move helped block the early inflow of criminal funds into the domestic virtual asset market and prevent damage.
Last year, the total size of coin transfers between Korea's five major virtual asset exchanges (Upbit, Bithumb, Coinone, Korbit, Gopax) and the Huione exchange reached 12.8 billion won. In Mar., Upbit reported measures related to Huione to financial authorities and filed a report with the police.
In Oct., police executed a search and seizure warrant on Upbit to obtain records of virtual asset transfers by Huione users, but this was a measure in accordance with the legal procedure required for Upbit to submit customer information to investigative authorities. An Upbit official said, "We were the fastest among domestic exchanges to block coin transfers with Huione and are actively cooperating with the police investigation. We will do our best to minimize harm to Koreans and prevent related crimes."