South Korea’s Financial Services Commission (FSC) is preparing to announce its decision regarding potential sanctions against Upbit, the country’s largest cryptocurrency exchange.
The review follows findings that Upbit failed to fully comply with anti-money laundering (AML) regulations, particularly in its customer verification procedures.
During a National Assembly session, FSC Chairman Kim Byoung-hwan confirmed that the decision-making process is nearing completion. Responding to concerns raised by lawmaker Kim Jae-seop about delays, he assured that the matter would be resolved soon.
He emphasized that while the review has taken longer than expected due to multiple meetings to gather perspectives from all involved parties, the regulatory body remains committed to reaching a swift conclusion.
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Upbit’s AML Compliance Issues Under Scrutiny
The Financial Intelligence Unit used its Upbit VASP license renewal inspection to find multiple potential violations of AML requirements. The investigators uncovered major problems with the Know Your Customer procedures since the law requires their implementation to prevent financial crimes.
South Korean regulations mandate that financial institutions verify customers’ identities using government-issued identification. The upbit verification system showed operational weaknesses and allowed possible violations to occur.
The identified potential security gaps make authorities worry about criminals using these gaps for illicit operations.
FSC Chairman Kim emphasizes the importance of strong regulatory oversight because the current regulatory body operates to preserve market naturalness. The authorities will take the necessary actions against Upbit, depending on their examination findings, and this could transform the cryptocurrency exchange industry in South Korea.
Conclusion
The FSC’s final decision on Upbit’s AML compliance violations is expected to have significant implications for the cryptocurrency sector. As South Korea moves towards easing restrictions on institutional crypto trading, regulatory oversight remains a priority to ensure transparency and prevent financial misconduct.
The outcome of the Upbit review will likely shape the regulatory landscape for virtual asset exchanges operating in the country.
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