Upbit, one of the largest cryptocurrency exchanges in South Korea, has reportedly received a suspension notice for alleged Know Your Customer (KYC) violations.

The Financial Intelligence Unit (FIU) of South Korea’s Financial Services Commission (FSC) has notified Upbit of possible punitive measures, according to a Jan. 16 report by Naver.

As part of the measures, the authorities seek to suspend new user registrations on Upbit for six months, with existing users unaffected.

According to the report, Upbit can submit its feedback on the restrictions to the FIU by Jan. 20. The authority plans to make a final decision on the penalty on Jan. 21.

Upbit is one of the largest South Korean crypto exchanges by volumes

South Korean authorities first reported on Upbit’s alleged KYC violations in November 2024, with the FIU identifying at least 500,000 to 600,000 breaches in its client identification process.

The authority spotted Upbit’s KYC violations while reviewing the company’s business license renewal.

Founded in 2017, Upbit is one of the largest crypto exchanges in South Korea and globally, trading $7.5 billion daily, according to CoinGecko.

South Korea’s KYC fines are up to $68,600 per case

According to South Korea’s Special Financial Transactions Act, the penalties for KYC violations can be up to 100 million Korean won (around $68,600) per case.

As Upbit was found to have at least 500,000 KYC breaches, the violations could potentially cost the company $34.3 billion.

Additionally, the Special Act on Financial Transactions stipulates local crypto companies are restricted from conducting transactions with unregistered crypto service providers.

According to Naver, Upbit has also violated this provision while conducting business with unregistered crypto service operators.

Related: South Korea postpones decision on corporate crypto investments

Cointelegraph approached the FSC and Upbit for a comment regarding the suspension notice but did not receive a response by publication.

The news comes amid South Korean authorities progressing with a long-running court case involving Lee Jung-hoon, the former chair of major local crypto exchange Bithumb.

On Jan. 16, Lee was reportedly acquitted in an appeal trial related to a large-scale customer data breach on Bithumb, which occurred in 2017 and affected 31,000 user accounts.

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