Upbit Faces Probe Over Suspected KYC Issues in License Renewal

Upbit, South Korea’s top cryptocurrency exchange, is under investigation. The Financial Intelligence Unit (FIU) suspects the company may have violated Know Your Customer (KYC) rules during its license renewal process. 

These violations raise concerns about Upbit’s adherence to customer verification regulations. If proven true, these issues could impact Upbit’s business license and lead to hefty fines.

KYC Violations Could Delay License Renewal

The FIU discovered between 500,000 and 600,000 cases where Upbit may not have followed KYC requirements. Some of these instances involved unclear or incomplete user identification, such as blurred names or registration numbers. 

Local news reports suggest that these violations could lead to fines of up to 100 million Korean won per case. With this many potential violations, there are growing fears that the license renewal process could be delayed.

South Korea’s Special Financial Transaction Information Act requires crypto exchanges to renew their licenses every three years. However, the investigation into Upbit’s KYC practices has caused delays. 

South Korean Authorities Increase Scrutiny of Crypto Firms

Since late August, South Korean regulators have conducted onsite inspections of Upbit’s renewal application. These inspections revealed several instances where KYC procedures were not properly followed. 

Upbit has not shared further details about the investigation, as South Korean law prevents the disclosure of ongoing cases. However, the potential penalties could be severe. 

As the investigation continues, the outcome will set an important precedent for crypto regulation in South Korea. The scrutiny of Upbit’s KYC practices could affect the entire industry’s approach to compliance.