The Korea Financial Intelligence Unit (FIU), South Korea’s top finance sector watchdog, is expected to impose a series of new sanctions on domestic digital asset exchanges for violating the country’s anti-money laundering (AML) and know your customer (KYC) obligations, according to a report from local outlet Naver.
The finance regulator is reportedly planning institutional and personnel sanctions, including fines, for exchanges Korbit, Gopax, Bithumb, and Coinone. The FIU will process the cases in sequence, following the order of its on-site inspections, using a “first-in, first-out” approach.
This latest action follows the sanctions imposed on Dunamu—the parent firm of South Korea’s largest digital asset exchange Upbit—in February, which included a disciplinary warning to Dunamu’s chief executive and a three-month suspension of new customer deposits, withdrawals, and transfers.
Over the past year and a half, the FIU has conducted on-site inspections of Upbit, Bithumb, Coinone, Korbit, and Gopax to review their compliance with the AML and KYC system. This was followed by a legal review and the convening of a sanctions review committee, which is reportedly still underway.
According to the Naver report, citing “an industry insider,” the sanctions process for the named exchanges will largely follow that of Dunamu; first determining individual and institutional sanctions, and then imposing similar fines.
The fine amounts have yet to be specified and will vary depending on the number and severity of violations, but they are expected to “reach into the hundreds of billions of won.”
Four exchanges are still awaiting decisions from the FIU, but most sanctions are expected to be completed by the first half of next year.
The announcement of the crackdown piles more woes on South Korea’s digital asset industry, coming as it does hot on the heels of reports earlier in November of potential further delays to the country’s proposed crypto tax regime, scheduled to come into force in January 2027.
According to a November 18 report from The Korea Times, the government has yet to establish the necessary infrastructure or release detailed guidelines, raising concerns that it may not meet the January 2027 deadline.
South Korean digital currency players can take some solace in the September news that the country is reportedly about to lift a seven-year restriction on digital asset trading and brokerage businesses being recognized as ‘venture companies,’ a change that would allow them to apply for tax breaks and financing support.
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Source: https://coingeek.com/south-korea-finance-watchdog-to-sanction-more-crypto-exchanges/
