The South Korean authorities has uncovered important Know-Your-Buyer (KYC) violations on Upbit, the nation’s largest cryptocurrency trade.
On Nov. 14, native media studies indicated that the Monetary Intelligence Unit (FIU) of the Monetary Companies Fee recognized these points throughout a routine enterprise license renewal evaluation for Upbit. The regulator has discovered between 500,000 and 600,000 potential KYC violations on the trade thus far.
KYC is a course of for verifying the identification of shoppers to adjust to anti-money laundering (AML) and counter-terrorism financing (CTF) legal guidelines. This usually entails registering actual names and submitting legitimate identification paperwork.
The FIU revealed that some Upbit customers offered insufficient identification for his or her KYC registration. In some circumstances, accounts have been opened with IDs that had blurry names and registration numbers, rendering the identities unrecognizable. This raises considerations that these accounts might be used for cash laundering or different illicit actions.
Beneath South Korean regulation, corporations discovered violating KYC laws might face fines of as much as 100 million received (roughly $71,600) per violation. Given the size of the violations, there may be hypothesis in regards to the potential monetary penalty Upbit might face.
[Editor’s Note: At an average of 550,000 potential violations, this could theoretically amount to $39 billion in fines should the letter of the law be followed.]
Moreover, the violations may delay Upbit’s license renewal course of, which is at the moment underneath evaluation. Based on the Korean Particular Monetary Transaction Info Act, digital asset operators should renew their licenses each three years.
Upbit utilized for renewal in August, however the approval could also be postponed because the FIU assesses every case individually and determines acceptable actions.
In the meantime, this new difficulty comes round a month after South Korea’s Monetary Companies Fee (FSC) revealed its intent to research Upbit’s market dominance. The authorities famous that the trade makes up practically 20% of the 22 trillion received deposits on Okay Financial institution which might be dangerous for the monetary establishment in the long run.
