Upbit Could Face Fines of Up to $13 Billion for Legal Violations

South Korea’s leading crypto exchange, Upbit, could face further regulatory problems following a recent audit by the Financial Intelligence Unit (FIU).

The move follows the regulatory body’s announcement that it had discovered Upbit committed nearly 9.6 million violations across ten categories, predominantly in Know Your Customer (KYC) requirements.

According to Representative Min Byung-duk of the Democratic Party, these 9 million infractions include cases where individual reused outdated ID images of newly issued ones, violating basic KYC re-verification procedures. These actions directly contradict the laws imposed under the Specific Financial Information Act, an important pillar in South Korea’s anti-money laundering framework.

Potential Fine on Upbit Could Exceed $13 Billion.

Based on the nature and scale of Upbit’s violations, Min Byung-deok estimates that the exchange could face fines of up to 183 trillion won, equivalent to approximately $13 billion.

Applying similar standards to Upbit’s alleged 9.34 million KYC violations, the potential fine could range between 45 trillion and 95 trillion won, depending on what precedent the court uses. However, in the most extreme interpretation, Min speculates the penalty could reach up to 183 trillion won, using the maximum fine allowed under the law.

Upbit is the most dominant exchange in South Korea’s digital asset industry with an over 80% market share. Therefore, any significant suspension of operations or a billion-dollar fine would have a significant impact on the nation’s crypto ecosystem.

Current Sanctions 

In February 2025, the FIU imposed a partial three-month suspension on Upbit services. The suspension included a ban on new customer deposits and withdrawals, while allowing existing users to trade. The restriction on fresh inflows disrupted trading volumes nationwide and raised concerns about liquidity.

Additionally, in January, Upbit and Bithumb were ordered to compensate users over 3.5 billion won (approximately $2.5 million). The compensation, one of the largest in the country’s crypto history, was mandated after users were affected by system failures during the unexpected declaration of martial law in December.

Upbit isn’t the only exchange facing regulation issues in the country. Since the implementation of stricter laws, South Korean authorities have begun inspections of other major exchanges, including Bithumb, Korbit, Coinone, and GOPAX.