The major cryptocurrency exchange is facing the risk of suspension.

The financial regulator of South Korea has issued a stern warning to the country's largest cryptocurrency exchange, Upbit, for allegedly violating Know Your Customer (KYC) and Anti-Money Laundering (AML) laws. Upbit is facing the risk of having its operations suspended for up to six months and has a limited time to respond. This situation could have significant impacts on the exchange's current and potential users.

Regulatory Pressure on Upbit is Increasing

Upbit, a leading cryptocurrency exchange based in South Korea, has come under the radar of regulatory authorities. The Financial Intelligence Unit (FIU) of South Korea issued a stern warning due to deficiencies in the exchange's customer identification processes.

According to sources familiar with the matter, the recent warning indicated that Upbit violated customer identification (KYC) and anti-money laundering (AML) regulations. It was stated that the exchange's operations could be suspended for up to six months due to these violations.

In a statement made by the regulatory authority, it was emphasized that existing users could continue their transactions, but new customer registrations would be halted. Upbit is required to respond to the allegations against it by January 20. The FIU will announce its final decision after evaluating the exchange's defense.

Another aspect of the investigation involves Upbit's transactions with unregistered foreign cryptocurrency companies. The exchange management argues that it is difficult to identify foreign platforms in advance and claims that there was no intentional violation of the law.

Due to the identified violations, Upbit may have to pay a fine of 100 million won (approximately $71,500) for each case. It is reported that the total fine amount could reach 35.8 billion won (approximately $27 million). In light of these developments, South Korean authorities have requested additional time to deepen their investigations, and the exchange's license renewal process has also been suspended.