South Korean regulators have imposed a three-month suspension on Upbit, restricting new user transactions and citing compliance violations, as part of a broader effort to tighten cryptocurrency oversight.
Regulatory Action Against Upbit
South Korean authorities have imposed a three-month partial suspension on Upbit, one of the country’s leading cryptocurrency exchanges, for violating regulatory compliance requirements. The Financial Intelligence Unit (FIU) announced that Upbit’s operator, Dunamu, engaged in transactions with unregistered virtual asset firms and failed to adhere to anti-money laundering (AML) and Know Your Customer (KYC) standards.
The regulatory notice stated that Upbit violated “the obligation to prohibit transactions with unreported virtual asset operators.” This decision is part of South Korea’s ongoing effort to tighten oversight of the crypto industry.
Impact on Users and Operations
The suspension, effective from March 7 to June 6, 2025, restricts new users from transferring assets to or from external wallets, including deposits and withdrawals. However, existing customers will be able to continue trading without any limitations. Upbit is also subject to financial penalties and internal compliance reviews, which could impact its standing in South Korea’s crypto market.
Acknowledging the suspension, Upbit stated,
“We fully understand the financial authorities’ efforts to stabilize anti-money laundering systems and strengthen compliance in the crypto sector. We will take necessary steps to prevent future violations.”
Regulatory Crackdown and Past Violations
This enforcement follows months of increasing scrutiny from South Korean regulators as the country moves to implement stricter cryptocurrency regulations. Five months ago, Upbit became the subject of an antitrust investigation over concerns about monopolistic practices in the digital asset market.
Additionally, a month prior to the current suspension, Upbit faced temporary restrictions following revelations of 700,000 KYC violations. This was in addition to an earlier investigation that flagged 600,000 similar infractions, prompting authorities to take stronger measures against the exchange.
Upbit’s Efforts For Compliance
The latest action comes as South Korea prepares to introduce the second phase of its crypto regulatory framework in the second half of 2025. With more than 30% of South Korea’s population investing in cryptocurrencies, regulators have been tightening controls to ensure compliance.
Despite its regulatory challenges, Upbit remains a dominant player in South Korea’s crypto market. In an effort to align with evolving regulations, Upbit became the first South Korean exchange to issue a public disclosure under the Virtual Asset User Protection Act seven months ago. Two years ago, it surpassed major global exchanges such as Coinbase and OKX in trading volumes.
However, since January 2025, Upbit’s daily trading volume has dropped nearly 70%, standing at approximately $4.6 billion.
Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.