South Korea’s FIU Investigates Over 600,000 KYC Violations Between License Renewals
South Korea's Financial Intelligence Unit (FIU) is reportedly investigating the 600,000 Know Your Customer (KYC) claims of one of the country's most popular cryptocurrency exchanges, Upbit. The inspection takes place when the exchange wants to renew its business license, which may arise in its operation.
Monopoly threats and regulatory control
According to local news reports, Upbit is under investigation for allegedly receiving blurred IDs that did not meet South Korea's strict KYC requirements. Since late August, South Korea's Financial Intelligence Unit (FIU) has been investigating Upbit's license renewal applications. During this review, they found at least 500,000 instances where KYC procedures were not properly followed. KYC, which verifies customer identities, is critical to preventing money laundering and terrorist financing. Crypto exchanges require users to open real-name accounts and complete KYC before trading or withdrawing funds to comply with anti-money laundering regulations.
This investigation follows concerns about Upbit's market dominance. The Financial Services Commission (FSC) recently launched an anti-monopoly investigation into its relationship with K-Bank. Reports suggest that 70% of K-Bank's deposits are related to crypto, which concerns the bank's confidence in Upbit. As a result, K-Bank recently pulled off a $732 million IPO that would have been South Korea's largest since 2022.
Crypto influence
Apbit, which has a 70% market share in South Korea's kriptovalyutnogo sector, is particularly profitable with its fee structure. It charges 0.05% of the transaction price for regular orders and 0.139% for pre-orders for transactions in South Korea's winning market.
These payments further highlight the country's role in shaping the crypto business landscape and highlight its dominant position in the domestic market. With Upbit trading $2.2 billion daily, the results of these investigations could have significant implications for the South Korean cryptocurrency market.
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