Korea FIU will impose penalties on major crypto exchanges. Korbit, Gopax, Bithumb, and Coinone face sanctions after Dunamu’s fine.
The Korea Financial Intelligence Unit (FIU) is expected to impose penalties on major crypto exchanges. These will target Korbit, Gopax, Bithumb, and Coinone, respectively. This was after previous sanctions against Dunamu.
FIU Enforcement Targets Major South Korean Crypto Exchanges
Industry insiders anticipate similar violations across exchanges. Penalties are likely to match Dunamu’s fine. The majority of measures are to end by the first half of next year. Previously, the FIU had fined Dunamu, who operates Upbit, 35.2 billion KRW (about $24.35 million).
Related Reading: South Korea FIU Cracks Down on Unregistered Crypto Exchanges | Live Bitcoin News
The financial authorities intend to impose institutional sanctions. They also plan to collect personnel sanctions and fines. This will be in the order of their on-site inspections. They are using a “first-in, first-out” approach.
According to financial sources, Korea FIU is planning to take action. It will soon be imposing sanctions. This is aimed at the surviving virtual asset exchanges. It comes after sanctions were put on Dunamu.
Since last year, the FIU have been carrying out on-site inspections. These were Upbit, Bithumb, Coinone, Korbit and GOPAX. They looked at compliance with anti-money laundering obligations. This included non-compliance of Know Your Customer (KYC) regulations.
Presently, most of the on-site inspections have been completed. The process of sanctions is under way. This includes legal review. It is also a process of convening a sanctions review committee.
The current strategy being used by the FIU is known as a “first-in, first-out” system. In addition, they are imposing sanctions against exchanges for that they inspected first.
Moreover, considering that on-site inspections were carried out in a definite order. Dunamu (August last year), Korbit (October), GOPAX (December), Bithumb (March this year) and Coinone (April). Sanctions are likely to be finalized in the same order.
Stricter Regulations Under Virtual Asset User Protection Act
The market anticipates that the illegal activities by exchanges are going to be regular. Such things include violations of KYC. They also include failure in reporting. The penalties are part of a larger, more stringent regulatory drive. This is working under the new Virtual Asset User Protection Act.
This act went into full effect on July 19, 2024. This act gives the Financial Services Commission (FSC) more power. It also empowers the FIU. They can oversee, monitor, and penalize virtual asset service providers (VASPs).
South Korea is also planning to get a monitoring system in 2025. This system will control cross-border transactions. Further regulations on the issuing of tokens are also planned. Disclosure requirements will also be introduced. This is part of the second part of its crypto legislation.
The regulatory environment in South Korea is constantly changing. It gives high priority to investor protection. It also prioritises anti-money laundering compliance.
In February, the FIU put him on a disciplinary warning. This targeted Dunamu’s CEO. It gave the institution a suspension of three months as well. This was for violation of the Special Financial Transactions Act, and a fine of 35.2 billion won was ordered.
The other exchanges are also expected to incur heavy penalties. These are linked to institutional and personnel sanctions. In addition, the total of the fines is likely to reach hundreds of billions of won. However, the exact amount may vary. It depends on the number and severity of violations.
With sanctions still pending against the remaining four exchanges, the sanctions of the FIU are unlikely to be completed this year. Most sanctions are expected to be completed in the first half of next year.