South Korea’s Financial Intelligence Unit (FIU) has imposed an institutional warning and fines totaling ₩27.3 billion ($1.89 million) on Korbit, citing widespread violations of the country’s anti-money laundering (AML) regulations.
In a statement the FIU said it had identified multiple breaches following a comprehensive on-site inspection of the cryptocurrency exchange conducted between October 16 and October 29, 2024.
The sanctions were finalized on December 31 following a meeting of the regulator’s sanctions review committee.
Thousands of AML Breaches Identified
According to the FIU, Korbit committed approximately 22,000 violations related to customer due diligence and transaction-restriction obligations.
The FIU states more than 12,800 cases involved failures in customer identification, including accepting unclear or incomplete identity documents, approving accounts with missing or improperly recorded addresses, failing to re-verify customer identities when required and allowing transactions for customers whose money-laundering risk ratings had been upgraded without additional checks.
An additional 9,100 cases involved breaches of transaction-restriction rules where Korbit allowed trading activity for customers whose identity verification had not been completed — a direct violation of Korean AML requirements.
Transactions With Unregistered Overseas Platforms
The FIU also found that Korbit facilitated 19 crypto asset transfers involving three overseas virtual asset service providers that were not registered under South Korean law. Such transactions are explicitly prohibited under the Specified Financial Transaction Information Act.
Separately the regulator identified 655 violations related to Korbit’s failure to conduct money-laundering risk assessments before supporting new products, including certain NFT-related services.
Accountability Measures
In addition to the institutional penalty the FIU said it has also imposed disciplinary measures on senior management. Korbit’s chief executive received a formal caution while the company’s compliance reporting officer was issued a reprimand, reflecting their responsibility for the scale and nature of the violations.
The FIU said the sanctions reflect a comprehensive review of the severity of the breaches, their causes, and the company’s corrective actions, as well as precedents under existing law.
The regulator added that further details of the sanctions will be published on its website following the completion of procedural steps, including the final confirmation of the fine amount after Korbit is given the opportunity to submit opinions.
The FIU emphasized it will continue to pursue follow-up enforcement actions stemming from ongoing inspections and warned that serious violations of AML regulations will be dealt with strictly.
“Strengthening AML capabilities and compliance frameworks among virtual asset service providers is essential for the crypto market to grow on the basis of public trust,” the FIU said.
Mirae Asset Group Explores Korbit Takeover
Earler this month it emerged Mirae Asset Group has opened talks to buy crypto exchange Korbit, as traditional finance keeps circling licensed crypto infrastructure.
The discussions run through Mirae Asset Consulting, a non-financial affiliate of the group, which has signed a memorandum of understanding with Korbit’s major shareholders, according to South Korean media reports.
Korbit is primarily owned by NXC, the holding company behind gaming giant Nexon, which controls about 60.5% of the exchange. SK Planet holds another 31.5%, reports said.
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