The FIU of South Korea has scheduled a review for Upbit next week to evaluate the allegations of 500,000 KYC violations.
Upbit, the largest cryptocurrency exchange in South Korea, is under increased scrutiny due to allegations of violations of the Know-Your-Customer (KYC) policy. A disciplinary hearing has been scheduled for January 21 by the Financial Intelligence Unit (FIU) of South Korea to assess the exchange’s regulatory compliance. Consequently, the crypto market may experience a substantial decline in activity during the review.
FIU Meeting to Evaluate Upbit’s KYC Violations
The FIU disclosed that the sanctions review meeting would evaluate the 500k+ suspected KYC breaches identified during an on-site inspection to renew the virtual asset service provider (VASP). This is particularly noteworthy.
According to reports, this sanctions-level meeting for Upbit is the first of its kind, and it will resolve the issues discovered during a VASP renewal inspection. This meeting will ascertain the potential sanctions that Upbit may incur, considering factors such as breaches in KYC compliance. The regulator would verify the severity of penalties and disciplinary actions against the crypto exchange by examining its explanation for its alleged violations.
Upbit is subject to scrutiny by the Financial Intelligence Unit (FIU) of South Korea
Upbit has been the subject of financial watchdog investigations since August last year. The FIU discovered 500,000-600,000 instances of unauthorized customer verification procedures during the license renewal process. This encompasses cases where accounts were approved even though the customer name or registration number was obscured, rendering identification impossible.
Even though these cases underscore the exchange’s reluctance to adhere to regulatory standards, whether they indicate KYC transgressions remains uncertain. Nevertheless, FIU will probably formulate conclusions after the disciplinary meeting, particularly in light of Upbit’s explanations.
The Regulation of Cryptocurrencies in South Korea
South Korea has initiated the process of establishing a regulatory framework that is specifically concentrated on cryptocurrency. The Financial Services Commission has initiated discussions regarding the second phase of crypto regulations, with a particular emphasis on customer protection and stablecoins, in a recent development.
South Korea’s dedication to user security is also emphasized by its recent partnership with the United States and Japan to address the escalating crypto threats. A paper was jointly published by the three countries on the last day, cautioning against the North Korean hackers’ surveillance of crypto.
The regulatory landscape of South Korea is undergoing a substantial transformation due to the FIU’s meeting regarding Upbit’s KYC violation. Although the meeting in South Korea determines its fate, it has the potential to influence global crypto regulations and laws.