Upbit, one of the largest Korean crypto exchanges based on trading volume, is facing a three-month partial suspension due to regulatory violations in South Korea.
The regulatory crackdown on Upbit stems from a broader antitrust investigation initiated by South Korea against the exchange.
Facing Regulatory Issues in South Korea
Dunamu Company, which owns Upbit Exchange, has been penalized by South Korean authorities for breaching regulations related to virtual asset trading. Local reports reveal that the violations include conducting transactions with unregistered virtual asset businesses.
Allegedly, Upbit Exchange also failed to comply with proper customer verification procedures and neglected to report suspicious transactions, resulting in a partial suspension of its business operations for three months. The authorities have restricted new customers from transferring virtual assets between March 7 and June 6, 2025.
In addition to the suspension, the exchange will face personnel actions and financial penalties, potentially impacting its position among Korean crypto exchanges.
Acknowledging the violations in an official statement, Upbit expressed regret for any inconvenience caused to users and committed to rectifying the issues to ensure full compliance with legal regulations. The exchange assured users that it would enhance its transaction management processes and implement measures to prevent future infractions.
Despite the regulatory sanctions, existing Upbit customers can continue trading without limitations. However, new users are temporarily banned from transferring virtual assets, including deposits and withdrawals, to external wallets. Upbit emphasized that the imposed sanctions are subject to potential changes through regulatory procedures.
Tightening Regulatory Measures in South Korea
The regulatory actions against Upbit are part of South Korea's efforts to enforce stricter compliance measures in the crypto sector. Following an antitrust investigation initiated five months ago, concerns arose regarding Upbit's potential engagement in monopolistic practices. The exchange also faced temporary suspensions previously over KYC violations.
As South Korea strengthens its regulatory grip, the government is set to implement the second phase of its crypto regulatory framework in the latter half of 2025. With a significant portion of the population actively participating in the crypto market, regulatory frameworks are evolving to address compliance and protection measures.
While Upbit navigates through this period of heightened regulatory scrutiny, the exchange has taken proactive steps to align with changing regulations. By being the first exchange to issue a public disclosure under the Virtual Asset User Protection Act seven months ago, Upbit aimed to enhance transparency and compliance within the cryptocurrency industry.
Despite regulatory challenges, Upbit has maintained a strong market position, surpassing global competitors in trading volumes among Korean exchanges. This resilience reflects Upbit's substantial user base and influence within the cryptocurrency industry.