South Korea Bans Upbit From Onboarding New Clients For 3 Months

South Korea’s Financial Intelligence Unit (FIU) has banned Upbit, one of the country’s largest crypto exchanges, from onboarding new clients for three months.

The announcement noted that the suspension was due to Upbit’s failure to comply with South Korean regulations, which ban exchanges from allowing transactions with unregistered crypto asset service providers (CASPs).

The ban, effective immediately, will prevent the exchange from accepting new users during this period, leaving the platform to focus on addressing the regulatory concerns raised by the agency. However, existing crypto exchange users will not be impacted by the measure and can continue trading activity.

Upbit Addresses Restrictions

Upbit addressed the FIU’s restrictions on its website and apologized for any inconvenience. It acknowledged that the latest sanctions, based on findings from the FIU’s 2024 on-site inspections, prevent new customers from transferring crypto assets.

“Upbit has reviewed the necessary improvements made in response to this sanction by the financial authorities and completed the measures,” the firm said.

The firm pointed out that certain “specific facts and circumstances” were not considered when determining the sanctions.

“The sanctions imposed this time may be subject to change through procedures in accordance with relevant regulations, and if the effect of the relevant measures is suspended or terminated, new members will also be able to use Upbit’s services without restrictions,” Upbit said.

Despite the temporary setback, the platform remains one of the most popular crypto exchanges in South Korea, known for its wide range of digital assets and user-friendly interface. The platform is expected to continue improving its systems, focusing on preventing financial crimes and ensuring the safety of its users. 

Upbit KYC Violations

The crypto giant noted it would share more information if it reached an agreement with authorities on potential changes to the sanctions. The announcement of Upbit’s three-month suspension followed reports that the FIU notified the crypto exchange in January about possible penalties for alleged Know Your Customer (KYC) violations. 

Furthermore, in November 2024, South Korean regulators reported Upbit’s alleged KYC violations, with the FIU identifying up to 600,000 instances of improper client identification.