Upbit may face sanctions over alleged financial regulatory violations in South Korea.

Upbit, the largest cryptocurrency exchange in South Korea, may face sanctions from the country's Financial Services Commission for allegedly failing to comply with know your customer (KYC) and anti-money laundering rules.

Last week, the platform received a notice of procedural sanctions from the FSC's Financial Information Analysis Institute, according to local media. tendency.

Upbit must submit a formal argument against the penalty by January 20. The FIU will then review the submitted response and issue a final decision on the matter.

If the penalty is upheld, new users on Upbit could be banned from withdrawing assets from the exchange for up to six months. In addition, the platform's cryptocurrency license has been renewed hanging Last year awaiting the results of the ongoing investigation.

The potential penalty is part of a broader effort by South Korean authorities to combat regulatory non-compliance following the $60 billion collapse of Terra's ecosystem in 2022. In the wake of Terra's collapse, the FSC stepped up its scrutiny of cryptocurrency exchanges and digital asset operators.

South Korea also plans to do so draft New regulations for cryptocurrencies by the end of 2025 as part of its efforts to unify the domestic digital asset economy. The initiative aims to achieve a balance between protecting consumers and supporting companies.

Part of that plan includes mitigation Restrictions on institutional cryptocurrency trading and possibly issuing real name accounts to experienced players.