Upbit Banned from Accepting New Users in South Korea for Three Months

• South Korean regulators impose a three-month partial suspension on Upbit over unregistered transactions and KYC violations,
• Upbit has assessed the cause of the regulation and started implementing them 

Upbit, one of South Korea’s largest crypto exchanges, has been hit with a three month partial suspension by the Financial Intelligence Unit (FIU) due to failure to comply with regulations. 

The penalty limits new user transactions and stems from issues related to unregistered business activities and inadequate customer verification.

The Financial Intelligence Ban on Upbit

South Korea’s Financial Intelligence Unit (FIU) has imposed a three-month ban on crypto deposits and withdrawals for new Upbit users due to policy violations.

The restriction is set to begin from March 7 to June 6, 2025. This restriction came after the financial authorities found out that the exchange conducted transactions with unregistered virtual asset firms and failed to meet anti-money laundering (AML) and Know Your Customer (KYC) standards.

New customers have been restricted and there cannot be transfers of crypto during this period, existing users can continue trading without limitations. Upbit acknowledged the penalty, apologized for any inconvenience, and committed to improving compliance.

The company, operated by Dunamu, stated it will strengthen its internal processes to align with regulations and prevent any future issues.

Upbit has assessed the required changes following the financial authorities’ sanctions and has already started  implementing them. 

The company noted that some details were not fully considered in the decision and suggested that some aspects of the penalties might be adjusted. It also stated that if any modifications are agreed upon with regulators, it will share updates accordingly.

Trading volumes on Upbit has been down 70% since January

A month ago, Upbit was hit with a brief suspension due to 700,000 KYC violations, which raised concerns from an earlier investigation that identified 600,000 similar cases. 

These issues prompted financial regulators to take stricter action as part of South Korea’s ongoing efforts to strengthen oversight. The latest restrictions come ahead of the country’s second phase of crypto regulations, set for the latter half of 2025.

With over 30% of the population involved in cryptocurrency authorities are increasing controls. Despite all the regulatory hurdles, Upbit still remains a market leader.

The company has also worked to meet new requirements, becoming the first local exchange to release a public disclosure under the Virtual Asset User Protection Act seven months ago, reinforcing its commitment to transparency.

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