Upbit has received a temporary business suspension from South Korea’s Financial Intelligence Unit (FIU) for three months. The regulator made the disclosure on Tuesday through an official statement.
As revealed, the ban will stop the cryptocurrency exchange from processing transactions for new users. The FIU disclosed that Upbit violated its policies that prevent exchanges from facilitating transactions with unregistered platforms.
Meanwhile, the FIU has kept close tabs with Upbit after reports revealed how the regulator accused the exchange of violating its Know Your Customer (KYC) laws. In November 2024, reports suggested that Upbit failed to follow the due process for the KYC procedure across 600,000 cases.
Thereafter, in January 2025, the FIU reached out to Upbit over the issue, warning the exchange it could take tough legal steps. According to a Binbits report, the FIU alongside the South Korea Financial Service Commission (FSC) initially sought a 6-month ban on the exchange.
In the report, the regulators intended to include fines in its sanctions against Upbit. Hence, the latest suspension emanated due to the effort of the regulator to bring the crypto trading platform into compliance.
How Upbit responded to the allegations
However, the cryptocurrency exchange has responded to the suspension, urging customers to remain calm as it resolves the issue with the FIU. In a blog post, Upbit indicated its disappointment over the impact of the sanction on the smooth running of the trading platform.
While explaining the impact of the suspension, the exchange narrated how the ban doesn’t stop existing users from trading freely on the platform. Upbit narrated how the ban only stops new users from depositing and withdrawing on its platform.
Furthermore, the exchange said it has made the needed adjustments the FIU mandated. By that, the cryptocurrency trading outlet stated that the regulator might relax the sanctions any time soon.
Upbit went on to reveal its willingness to improve its compliance efforts and enhance collaboration with regulators in the country.
Side Note
The ban on Upbit is a significant setback for the exchange considering its growing status in Asia. Recall that in October 2023, the cryptocurrency exchange received regulatory approval in Singapore.
With the license, the crypto trading platform became one of the leading and registered cryptocurrency exchanges in Singapore. In November 2024, South Korean authorities identified North Korean hacker groups Lazarus and Andariel as the brains behind the $50 million hack on Upbit.
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