Upbit, one of the largest Korean crypto exchanges by trading volume, faces a three-month particle suspension for violating industry regulations.

This development is the culmination of regulatory clampdowns on the platform following South Korea’s move to open an antitrust investigation against Upbit exchange.

Upbit Suspended Amid Regulatory Violations in South Korea

South Korean authorities sanctioned Dunamu Company, the owner of Upbit Exchange, for violating regulations related to virtual asset trading. Local media reported on Tuesday that the violations included engaging in transactions with unregistered virtual asset businesses.

Reportedly, Upbit Exchange also failed to adhere to proper customer verification procedures and neglected to report suspicious transactions. As a result, Upbit faces a partial suspension of business operations for three months.

Specifically, the authorities banned new customers from transferring virtual assets between March 7 and June 6, 2025.

Additionally, the exchange is subject to personnel actions and a financial penalty. This development could harm Upbit’s heft among Korean crypto exchanges.

In an official announcement on its website, Upbit acknowledged the violations. The exchange also committed to taking corrective actions to comply fully with legal regulations.

The company regretted the inconvenience it caused users and assured them of improvements to its transaction management. Upbit also said it would monitor the system to prevent future infractions.

“…We deeply sympathize with the purpose of the financial authorities’ recent sanctions, which are aimed at stably establishing the anti-money laundering system and strengthening the legal compliance system through strict discipline on virtual asset operators,” read an excerpt in the statement.

Despite the sanctions, existing Upbit customers can continue trading without restrictions. While new users can trade, they are temporarily restricted from transferring virtual assets, including deposits and withdrawals, to external wallets. Upbit also emphasized that the imposed sanctions might be subject to changes through regulatory procedures.

South Korea Tightens Regulatory Grip

Meanwhile, this regulatory crackdown is part of a broader effort by authorities to enforce stricter compliance measures in South Korea’s crypto sector. The recent penalties follow months of increased scrutiny on Upbit.

The South Korean government launched an antitrust investigation into Upbit five months ago. Authorities examined whether the exchange had engaged in monopolistic practices. Furthermore, just a month ago, Upbit’s operations were temporarily suspended amid allegations of 700,000 KYC (Know Your Customer) violations.

This was a continuation of concerns raised three months before that. As BeInCrypto reported, South Korea’s financial regulator flagged Upbit for 600,000 potential KYC violations, prompting further regulatory action.

As Upbit navigates this period of regulatory scrutiny, South Korea is tightening its regulatory grip. The country plans to introduce the second part of its crypto regulatory framework in H2 2025.

These adjustments come as the country’s populace comprises a notable number of crypto market participants. Specifically, as of November, over 30% of South Korea’s population invested in crypto.

While Upbit now faces intensified scrutiny, the company has also taken steps to comply with changing regulations. Seven months ago, it became the first exchange in South Korea to issue a public disclosure under the newly implemented Virtual Asset User Protection Act.

This move was seen as a proactive step in aligning with the country’s new regulatory framework and improving transparency within the cryptocurrency industry.

Despite these regulatory challenges, Upbit has historically maintained a strong position in the market. Two years ago, it outperformed major global exchanges such as Coinbase and OKX, leading in trading volumes among Korean exchanges while its US rivals struggled. This dominance reflects the platform’s significant user base and influence within the cryptocurrency industry.

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