Dunama, which operates South Korea’s largest cryptocurrency exchange, said it may appeal the 35.2 billion won ($25 million) fine and other sanctions imposed on Upbit by South Korea’s financial watchdog’s intelligence department.
In addition to the fine, the Financial Intelligence Unit (FIU) imposed a three-month suspension on onboarding new customers and issued a warning to executives as it cracks down on anti-money laundering (AML) and know-your-customer (KYC) violations, local news service Newsis reported on Monday.
“We are conducting a careful internal investigation, including evaluating the accuracy of the sanctions results,” a Dunamu spokesperson told CoinDesk via email. A spokesperson said the unit has committed fraud in the past.
“The FIU imposed a fine of 2 billion won on Hanbitco for KYC deficiencies involving about 200 users, but the fine was later reversed by a court in Seoul, concluding that the violation did not amount to money laundering,” the spokesperson said.
Local financial authorities said the campaign is part of a broader effort to strengthen anti-money laundering enforcement in the digital asset sector in the country. It explained that the inspections mainly focus on KYC compliance and reporting of suspicious financial transactions.
Earlier this month, the FIU announced that it had discovered “approximately 5.3 million violations of know-your-customer obligations” “during on-site anti-money laundering inspections carried out in Dunamu.” Dunham also said he failed to report 15 suspicious transactions.
A company spokesperson said, “Dunam (Upbit Korea) will strengthen investor protection measures and make further efforts to prevent this from happening again.” “We will continue to do our best to provide a safe trading environment for all our customers.”
News of the inspection comes as the Financial Services Commission ordered exchanges to suspend new crypto lending products until formal guidelines are implemented, citing increased risk to users. FIU is an institution of the FSC.
“The FIU will continue to inspect and review the legal compliance systems of crypto asset operators in order to establish a robust anti-money laundering system,” the agency said.
In a separate statement, the FIU reported that it inspected four other crypto exchanges, Bithumb, Coinone, Korbit, and GOPAX, to assess their AML and other regulatory compliance and found that these exchanges were also in violation of several rules and regulations. None of the exchanges responded to CoinDesk’s requests for comment.
South Korea’s financial regulation campaign is carried out in a “first in, first out” order, and each exchange will be inspected in the order in which it is reviewed. The first target after the August 2024 evaluation was Dunamu, followed by Korbit (October 2024), GOPAX (December 2024), Bithumb (March 2025), and Coinone (April 2025).
According to data from Coingecko, six crypto exchanges operate in South Korea, including Upbit (Bithumb, Korbit, INEX, Oneone, GoPax), which is merging with Naver and is said to be considering an IPO on Nasdaq, with a combined trading volume of about $2.6 billion in the past 24 hours.
