South Korea's Financial Intelligence Unit (FIU) announced a partial business suspension for Upbit, a leading South Korean cryptocurrency exchange, effectively halting crypto deposits and withdrawals for new customers.
This three-month restriction, which was publicized on February 25, stems from Upbit's non-compliance with local policies that prevent exchanges from engaging with unregistered crypto asset service providers (CASPs).
In response to the FIU's sanction, Upbit issued an apology on its website for any inconvenience caused to its customers. The exchange acknowledged the FIU's findings from on-site inspections conducted in 2024, which led to the prohibition of new customers from transferring crypto assets. Upbit has reportedly completed necessary improvements following the financial authority's directive.
The exchange also noted that the scope of the sanctions might be subject to amendments, citing "specific facts and circumstances" that have yet to be considered. Upbit remains open to the possibility of changes through regulatory procedures, which could potentially lift or terminate the current restrictions for new members.
Existing Upbit customers are unaffected by this sanction and can continue using all services provided by the exchange. However, the company has experienced a significant downturn in its trading volumes, which have plummeted by approximately 70% since January, with current daily volumes recorded at $4.6 billion.
Upbit, established in 2017, holds the title of the largest centralized cryptocurrency exchange in South Korea and is ranked 23rd globally by trust score, according to CoinGecko. The recent sanction follows earlier reports of Upbit's potential punitive measures related to alleged Know Your Customer (KYC) violations, with up to 600,000 breaches identified by the FIU in its client identification procedures as of November 2024.
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