South Korea's Upbit operator Dunamu argues that past FIU actions have been overturned in court

Dunamu, the operator of South Korea’s largest cryptocurrency exchange, Upbit, is considering an appeal against a $25 million fine and other sanctions imposed by the country’s Financial Intelligence Unit (FIU). 

The FIU has found rule violations across all other major Korean exchanges, Bithumb, Coinone, Korbit, and GOPAX, as regulators increase their efforts in cracking down on anti-money laundering violations across the country’s digital asset sector.

A penalty and an internal assessment

The FIU imposed a 35.2 billion won ($25 million) penalty on Upbit alongside a three-month suspension on new customer onboarding and formal warnings to executives, following an investigation that uncovered approximately 5.3 million instances of inadequate customer due diligence as well as 15 instances where the company failed to report suspicious transactions.

A spokesperson for Dunamu reportedly stated that they “are conducting a careful internal review, including an assessment of the accuracy of the sanction’s findings.”

The company also pointed to historical precedent where FIU enforcement actions were overturned, citing the incident with Hanbitco, which was slammed with a 2 billion won fine due to shortcomings with its KYC dealings involving about 200 users. A Seoul court struck the ruling out, concluding that the violations did not lead to money laundering.

The spokesperson added that they have put in place investor protection measures and will continue to work to prevent a repeat of the events that led them into hot water with the regulator. “We remain committed to providing a safe trading environment for all customers,” the spokesperson said.

South Korean regulators turn up the heat

The FIU has conducted inspections of four other major exchanges, including Bithumb, Coinone, Korbit, and GOPAX, finding violations of several rules and regulations across the board.

The regulator reportedly inspected Dunamu first in August 2024, followed by Korbit in October 2024, GOPAX in December 2024, Bithumb in March 2025, and Coinone in April 2025, and all of them were found wanting with violations of several rules.

The Financial Services Commission, the FIU’s parent agency, has simultaneously ordered exchanges to suspend new crypto lending products until formal guidelines are implemented, citing growing risks to users.

South Korean authorities flagged a record 36,684 suspicious crypto transactions in the first eight months of 2025 alone, exceeding the combined totals from 2023 and 2024, when suspicious transaction reports numbered 16,076 and 19,658, respectively.

Between 2021 and August 2025, the Korea Customs Service recently referred around $7.8 billion worth of foreign currency smuggling crimes to prosecutors, with approximately 83%, about $6.8 billion, linked to crypto transactions.

A South Korean court recently jailed a man who launched a fake securities trading platform and used cryptocurrency to launder $4.2 million in profits.

The timing proves particularly delicate for Upbit, which is in the process of merging with Naver and has indicated that it is considering an initial public offering on Nasdaq.

“Going forward, the FIU will continue to inspect and review the legal compliance systems of virtual asset operators to establish a robust anti-money laundering system,” the agency said in a statement.

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