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Photo = Yonhap news |
[Alpha Biz= Kim Jisun] Lee Bok-hyun, the governor of South Korea’s Financial Supervisory Service (FSS), has announced an additional inspection of the cryptocurrency exchange Upbit within the year.
Speaking to reporters after a meeting with securities firm CEOs on the 5th, Lee stated, “An inspection of Dunamu (Upbit’s operator) is scheduled for this year.” He added, “Dunamu has deficiencies in fundamental anti-money laundering (AML) procedures, including Know Your Customer (KYC) protocols, making the inspection inevitable.” Lee also mentioned that the FSS is currently conducting an inspection of another exchange and will begin Upbit’s inspection as soon as the current one is concluded.
The upcoming inspection will focus on assessing whether the issues identified in previous audits have been adequately addressed. “Rather than taking an overly punitive approach, we aim to check if past IT system failures have been properly rectified and to examine any shortcomings in detecting unfair transactions,” Lee explained.
Previously, the Financial Intelligence Unit (FIU) under the Financial Services Commission (FSC) had imposed sanctions on Dunamu, including a three-month partial suspension of business that prohibits new customer crypto transfers, a reprimand warning for CEO Lee Seok-woo, and disciplinary measures against nine compliance officers, including dismissal recommendations. These actions were taken after last year’s on-site inspection revealed hundreds of thousands of violations, including transactions with unregistered entities and failures in customer due diligence (KYC) obligations.
In response, Dunamu has filed an administrative lawsuit challenging the partial business suspension. Industry sources indicate that on February 27, Dunamu filed a lawsuit with the Seoul Administrative Court to revoke the decision and requested a stay of execution.
AlphaBIZ Kim Jisun(stockmk2020@alphabiz.co.kr)
