According to South Korean authorities the Financial Intelligence Unit ordered the Exchange to suspend some business functions which prevent new customers from making transactions.
Announced on Feb. 25, the FIU issued a three-month rule preventing new Upbit users from making crypto moves into and out of their accounts. The business suspension applies due to allegations that The Exchange broke South Korean rules banning exchanges from handling funds moving between crypto asset service providers without proper registration.
Upbit published a statement at its website to speak directly with customers about how their services had been limited. Following the results of regulatory inspections that year authorities blocked new users from moving their crypto assets on the FIU level.
FIU Scrutiny Impacts Upbit
Upbit reviewed its planned changes after receiving the monetary authority sanction and confirmed them ready for implementation. The business argues certain specific points should be evaluated and adjusted. Upbit made sure its users learned about possible updates through its meetings with financial law authorities.
“The sanctions imposed this time may be subject to change through procedures in accordance with relevant regulations, and if the effect of the relevant measures is suspended or terminated, new members will also be able to use Upbit’s services without restrictions.”
Upbit lets its established customers continue using all company services because of this decision. Back in January 2024 the Exchange learned about KYC failures in a note from the Financial Intelligence Unit. The FIU ordered an Upbit probe for failing to follow KYC procedures although their agency discovered Upbit broke rules with 600,000 improper customer identification records in November 2024.
After its launch in 2017 Upbit seized South Korean crypto trading dominance and ranked as number 23 in global markets per CoinGecko metrics. Upbit lost its trading volume which fell from $14.6 billion to $4.6 billion by January 2024 because of the FIU notice.
South Korea controls cryptocurrency businesses while the FIU upgrades its checks on regulatory adherence. The market believes the FIU will require all South Korean crypto companies to meet stronger industry standards.
Upbit must recover its operations smoothly because other South Korean exchanges will continue running business as usual. While this exchange promises to help officials monitor digital currency, South Korea will stay active in governing this industry.
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