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South Korea's financial regulator has found that Upbit approved over 500,000 accounts without proper ID checks. This is significant because Upbit is the largest cryptocurrency exchange in South Korea. In October alone, it processed more than $48.2 billion in crypto transactions.
During a review for license renewal, the Financial Services Commission (FSC) discovered that Upbit did not follow know-your-customer (KYC) rules for at least 500,000 to 600,000 cases. A local newspaper, Maeil Business Newspaper, reported these findings.
Some accounts were opened with blurred ID cards, while others were created without any verification at all. Violating KYC rules can lead to fines of up to 100 million won (about $71,740). Upbit might also face challenges when trying to renew its license.
The Block reached out to Upbit for comments on this issue. However, an official from the FSC declined to share more details about the investigation. Currently, Upbit ranks fifth among the top exchanges on CoinMarketCap, reporting over $7.7 billion in trade volume in the last 24 hours. In October, it managed over $48.2 billion in crypto transactions, according to The Block's data.
FSC Chair Kim Byung-hwan mentioned last month that he would look into the monopolistic structure of South Korea's crypto exchange market, which is largely dominated by Upbit. This situation is worth watching closely.