Regulatory Crackdown Targets Major Platforms
South Korea’s Financial Intelligence Unit (FIU) is preparing to impose a new wave of institutional and personal sanctions on several domestic cryptocurrency exchanges, following its landmark penalties against Dunamu, the operator of Upbit.
According to financial industry sources, Korbit, GOPAX, Bithumb, and Coinone are next in line to face disciplinary action for alleged violations of anti-money laundering (AML) regulations and Know Your Customer (KYC) requirements.
Background of the Inspections and Sanctions
The sanctions are part of a broader regulatory crackdown that began last year, when the FIU launched on-site inspections of major exchanges to assess compliance with the Special Financial Transactions Act.
The inspections occurred sequentially: Dunamu in August, Korbit in October, GOPAX in December, Bithumb in March, and Coinone in April. Regulators are now expected to finalize sanctions in the same “first-in, first-out” order.
Previous Penalties and Anticipated Consequences
In Dunamu’s case, the FIU issued a disciplinary warning to the CEO earlier this year, imposed a three-month suspension on new customer deposits and withdrawals, and levied a record fine of 35.2 billion KRW (approximately USD 24.35 million).
Industry analysts anticipate that the other four exchanges will face penalties of similar severity, as violations across platforms reportedly involve comparable issues, chiefly KYC failures and inadequate reporting of suspicious transactions.
Timeline and Potential Delays
The sanctions process for Korbit, GOPAX, Bithumb, and Coinone is already underway. Legal reviews and sanctions review committee meetings are in progress, and most disciplinary actions are expected to be completed by the first half of next year.
However, Bithumb’s case may encounter delays due to an additional on-site inspection related to its order book operations.
Fines for the remaining exchanges could reach into the hundreds of billions of won collectively, though the exact amounts will depend on the type and frequency of confirmed violations.
With four major exchanges still awaiting decisions, experts say it is unlikely that the FIU will finalize all sanctions within the current year.
Broader Implications for the Virtual Asset Sector
South Korea’s ongoing enforcement drive underscores regulators’ determination to tighten oversight of the virtual asset sector and reinforce AML compliance across the industry.