Upbit, the largest cryptocurrency exchange in South Korea operated by Dunamu, is considering appealing a ₩35.2 billion (≈ $25M) sanction and a partial three-month suspension of activity. The measure was imposed by the Financial Intelligence Unit (FIU) in November 2025 and centers on alleged AML/KYC violations.
The FIU attributes to Upbit 8.6 million alleged KYC breaches and around 45,000 transfers to unregistered foreign providers, according to the November 2025 sanction. The measure included specific restrictions on deposits and withdrawals for new customers, a block that impacted the platform’s user acquisition capacity and operational liquidity. In a previous review, in March 2025, the FIU had noted 34,777 KYC violations, 5,785 incomplete addresses and 44,948 transfers to unregistered foreign services; those figures are part of the regulator’s file and argumentation.
Upbit responds that it has implemented significant improvements to its AML/KYC controls and that it complies with the so-called ‘Travel Rule’ for transfer traceability. The company argues that the sanctions are disproportionate given recent investments in controls and auditability, and believes an appeal could force a more nuanced review of the proportionality of the penalty.
Regulation and compliance by Upbit
The FIU’s action is not isolated, with Bithumb, Coinone, Korbit and GOPAX also under inspection for alleged similar AML/KYC deficiencies. Industry sources expect further sanctions as reviews progress, and the consolidated scope of potential fines could amount to hundreds of billions of won, according to internal projections cited by market analysts. For operators and users, this implies a more demanding compliance environment where operational deficiencies quickly translate into regulatory costs and service restrictions.
The outcome of Upbit’s appeal will set an operational and legal precedent: confirmation of the fine would reinforce a hardline stance, while alteration or revocation could guide supervisors on proportionality and acceptable technical remediation.
Upbit’s appeal will define not only Dunamu’s financial fate, but the regulatory certainty for the entire South Korean cryptocurrency market.
