Upbit's parent company Dunamu was heavily fined 25 million USD by the South Korean FIU, the official response: will appeal.

The Financial Intelligence Unit (FIU) of South Korea officially issued a hefty fine of 35.2 billion KRW (approximately 25 million USD) to Dunamu, the operating company of South Korea's largest cryptocurrency exchange, Upbit, earlier this month. In response to the heavy penalty, Dunamu quickly stated that it is conducting an internal review and considering filing an administrative lawsuit. (Background: Dunamu, Upbit's parent company, was fined 35.2 billion KRW, marking the most expensive fine in the history of South Korean cryptocurrency.) (Additional background: The South Korean exchange Upbit merged with Naver to go public on the Nasdaq in the US, with a valuation of 34 billion USD.) The FIU of South Korea officially issued a hefty fine of 35.2 billion KRW (approximately 25 million USD) to Dunamu, the operating company of South Korea's largest cryptocurrency exchange, Upbit, while also ordering Upbit to prohibit new user sign-ups and deposits starting immediately for a period of three months. This is one of the heaviest fines imposed on virtual asset exchanges in South Korea in recent years. Specific reasons for the FIU's fine The FIU stated that this penalty stems from an on-site anti-money laundering (AML) inspection of Dunamu conducted in August 2024, which revealed approximately 5.3 million cases of 'violations of customer identity verification obligations', along with 15 suspicious transactions that were not reported as required by law. The FIU pointed out that these violations severely affect the integrity of South Korea's anti-money laundering system. Additionally, the FIU issued written warnings to senior executives, including Dunamu's CEO, demanding immediate rectification. It is worth mentioning that this enforcement action is not solely targeting Upbit. The FIU revealed that inspections of four other major exchanges, namely Korbit, GOPAX, Bithumb, and Coinone, have been completed, confirming that they also have multiple violations, with fines to be imposed in a 'first come, first served' manner. South Korean financial authorities emphasized that this move is aimed at enforcing compliance standards in the domestic virtual asset industry amidst heightened fluctuations in the global cryptocurrency market. Dunamu considers filing an appeal In light of the heavy penalties, Dunamu quickly stated that it is conducting an internal review and considering filing an administrative lawsuit. A Dunamu spokesperson told the media: 'We are carefully assessing the factual determinations regarding the penalties. The FIU had previously fined another exchange, Hanbitco, 2 billion KRW for similar reasons, but the Seoul court later revoked the fine entirely, reasoning that 'the violations did not actually lead to money laundering activities.' Dunamu emphasized that the company has significantly strengthened investor protection measures and pledged to continue efforts to prevent similar incidents from recurring. Currently, Upbit is merging with South Korean internet giant Naver and plans for a Nasdaq IPO, and this heavy penalty along with the imposed three-month business restrictions may have a significant impact on its valuation and listing timeline. Related reports Upbit's trading volume plummeted by 80%, and even South Koreans are no longer trading cryptocurrencies? What effect would Naver's acquisition of Upbit have? The birth of a super platform in South Korea? South Korea's Naver is acquiring Upbit cryptocurrency exchange! Will it be possible to trade crypto assets and KRW stablecoins using LINE in the future? <Upbit's parent company Dunamu was fined 25 million USD by South Korea's FIU, official response: will file an appeal> This article was first published in BlockTempo, the most influential blockchain news media.