What You Should Know

• If confirmed, Upbit could suspend new customer-related activities for up to six months.
• The sanctions may primarily hinder new customers from transferring virtual assets outside the platform for a defined duration, as stated by Upbit in a report to Maeil.

The crypto exchange Upbit, recognized as one of South Korea’s largest, may soon face sanctions for allegedly failing to meet critical money laundering regulations, according to a local news outlet.

Last week, Upbit received a notification regarding the potential sanctions from the Financial Information Analysis Institute under the Financial Services Commission. Should these sanctions take effect, the platform could be limited in its ability to accept new customers for a period of six months.

This action could lead to substantial restrictions for new users, specifically regarding the ability to transfer virtual assets out of the exchange during this time period. A statement from Upbit confirmed the possible implications revealed by the local news report.

As per their engagement with CoinDesk, Upbit will provide its feedback to the FIU by the 20th, which will subsequently evaluate the situation.

Notably, South Korean authorities have been intensifying their scrutiny of crypto exchanges since the collapse of the stablecoin Terra in 2022, fueling calls for more rigorous oversight.