More than 500,000 accounts were identified that did not meet the proper verification standards. The matter was mainly raised as users had submitted blurred identification documents and it was still accepted.
The FIU plans to shift its focus to the effect of these violations over the future of the platform along with the business license renewal process.
Radiant Capital (RDNT) has also been charged with a trading suspension by the South Korea Digital Asset Exchange Association (DAXA).
Upbit, the largest crypto exchange from South Korea, is under scrutiny for violating KYC at the time of its license renewal process. The Financial Intelligence Unit has reported more than 500k cases of inappropriate customer verification.
Breaching the laws comes with increased concerns about money laundering risks. Now, the renewal of the license of the exchange is at high risk. The case is keenly monitored by the officials and they are also looking for the probable impact on the future of the exchange.
The matter was revealed after the regulators of South Korea, the FIU, initiated a deep inspection of the business license renewal applications of the company in August 2024. The KYC process is very important for any company to protect itself from money laundering but it was not carried out well.
An invitation to illegal activities
As reported by MK, a South Korean media outlet, more than 500k accounts were identified that did not meet the proper verification standards. The matter was mainly raised as users had submitted blurred identification documents and it was still accepted.
This creates a sense of doubt regarding the commitment of Upbit to maintaining regulatory standards. Not only 500k but this number keeps going up as the investigation process moves forward.
The unclear images of the ID mostly consisted of illegal names and the registration numbers were provided without verifying properly. This type of disaster leads to an invitation for criminal activities and due to this the credibility of the KYC system of the platform is also compromised.
The strict scrutiny
The FIU also plans to shift its focus to the effect of these violations over the future of the platform along with the business license renewal process. The scrutiny by the officials will present a conclusion and impose fines on the platform depending on what the findings suggest.
The careful examination came after Upbit faced more scrutiny for leading the market and having the strings tied to K-Bank, which made the regulatory landscape of the platform more complex.
The scrutiny throws a light on the risks linked with inhibited increase in the landscape of crypto.
Adding more to this, Radiant Capital (RDNT) has been charged with a trading suspension by the South Korea Digital Asset Exchange Association (DAXA). According to the reports, the exchange was not able to address security concerns after the latest breach.
DAXA has decided to suspend RDNT trading to protect investors till the security issues are sorted out.
