Upbit, South Korea’s largest crypto exchange, is under scrutiny for allegedly approving a significant number of accounts without proper identification verification.
Reports indicate that the Financial Services Commission (FSC) has identified between 500,000 and 600,000 violations related to know-your-customer (KYC) regulations during a routine license renewal review.
According to a report by Maeil Business Newspaper, the FSC discovered instances where user accounts were created using blurred identification documents, and other accounts were established without adequate verification processes.
Such breaches of KYC rules could lead to substantial fines, potentially reaching up to 100 million won (approximately $71,740). Additionally, these violations may complicate Upbit’s ongoing efforts to renew its operating license.
As the fifth-ranked exchange on CoinMarketCap, Upbit has demonstrated significant trading activity, processing over $7.7 billion in trades within the last 24 hours and exceeding $48.2 billion in total transactions for October alone, according to The Block.
The FSC’s chair, Kim Byung-hwan, has previously emphasized the need for an investigation into the monopolistic practices within South Korea’s crypto exchange sector, which is largely dominated by Upbit.
The current investigation’s implications may extend beyond financial penalties, potentially affecting the exchange’s market position and operational capabilities.