Korbit Joins Upbit Under Fire as South Korea Hands Down $1.9M AML Penalty

Key Takeaways

• South Korea’s FIU fined Korbit $1.9 cardinal for anemic AML and KYC rules connected December 31, 2025.

• Main issues: 22,000 unverified users, deals with unregistered overseas platforms, and mediocre hazard checks.

• Penalties see a fine, a informing to exchange, and the CEO, pursuing Upbit’s earlier larger fine.

South Korea’s Financial Intelligence Unit (FIU) recovered the Korbit crypto speech successful usurpation of the Specific Financial Information Act.

The latest uncovering comes conscionable months aft South Korea’s largest exchange, Upbit, was recovered blameworthy of akin AML and idiosyncratic verification violations.

The FIU imposed an organization informing and a KRW 2.73 cardinal (about $1.88 million) good connected the Korbit speech for its operational violations.

The regulator issued a caution to the CEO and a reprimand to the reporting officer.

The FIU highlighted respective failures successful lawsuit owed diligence, transaction restrictions, dealings with unreported overseas VASPs, and AML hazard assessments for NFTs. 

The FIU identified aggregate breaches of AML/KYC rules and the Specific Financial Information Act:

• Approximately 22,000 cases wherever trading was allowed without completing the required lawsuit recognition procedures.

• Improper handling of transaction limits and dealings with unregistered overseas virtual plus work providers (VASPs). This included 19 cryptocurrency transactions with 3 unreported overseas VASPs.

• 655 violations related to inadequate wealth laundering hazard assessments, peculiarly for caller concern areas specified arsenic non-fungible tokens (NFTs).

South Korea’s FIU, portion of the Financial Services Commission, has been conducting on-site inspections of large cryptocurrency exchanges to enforce anti-money laundering (AML) and know-your-customer (KYC) regulations.

Korbit was fixed much than 10 days to respond earlier the fines were finalized.

These inspections travel a “first-in, first-out” bid based connected the exchanges’ registration dates, opening with Upbit’s relation Dunamu successful August 2024, followed by Korbit successful October 2024, GOPAX successful December 2024, Bithumb successful March 2025, and Coinone successful April 2025.

The latest enforcement enactment follows the regulator’s November fines and enforcement enactment connected the country’s starring crypto exchange.

The FIU imposed a good of 35.2 cardinal KRW (approximately $25 million) for wide AML and KYC breaches.

Specific issues included astir 5.3 cardinal instances of failing to verify lawsuit identities decently and 15 cases of unreported suspicious transactions.