South Korea Hits Crypto Exchanges With Major AML Sanctions

South Korea’s FIU is imposing major sanctions on leading crypto exchanges for AML and KYC violations, with fines, suspensions, and possible license revocations expected by mid-2026.

South Korea’s Financial Intelligence Unit (FIU) is intensifying its crackdown on major domestic cryptocurrency exchanges for widespread anti-money laundering (AML) and know-your-customer (KYC) compliance failures. Following thorough on-site inspections of leading platforms including Upbit, Bithumb, Coinone, Korbit, and GOPAX, the FIU uncovered significant breaches such as inadequate customer due diligence, insufficient transaction monitoring, and failure to report suspicious activities. The enforcement process, which began with Dunamu (Upbit) receiving a 35.2 billion won fine and a three-month suspension, is proceeding in the order of inspection dates, with Korbit and Gopax expected to face penalties next. Sanctions may include substantial fines, operational suspensions, and even license revocations, with most actions anticipated to conclude by the first half of 2026. This regulatory push signals a new era of strict oversight for South Korea’s digital asset sector, likely resulting in increased compliance costs, potential market consolidation, and enhanced investor protection.