South Korea's financial watchdog, the Financial Intelligence Unit (FIU), is intensifying its efforts to enforce anti-money laundering (AML) compliance in the country's growing crypto market. The FIU is preparing to issue a fresh round of institutional and individual sanctions, along with substantial fines, against major domestic virtual asset exchanges that failed to meet their AML obligations.
- Inspection and Sanction Pipeline:The FIU has completed on-site inspections at the top exchanges—Upbit (operated by Dunamu), Bithumb, Coinone, Korbit, and GOPAX—checking critical areas like Know Your Customer (KYC) protocols and suspicious transaction reporting.
- The FIU is using a first-in, first-out approach, tackling cases based on the order of inspection.
- Dunamu Sets the Precedent: The process for the remaining exchanges is expected to mirror the case against Dunamu (Upbit's operator), which was penalized in February with a disciplinary warning for its CEO and a three-month suspension on new deposits/withdrawals, followed by a 35.2 billion won fine in November.
- Expected Penalties: Given that inspectors reviewed similar AML controls across all exchanges, industry observers anticipate comparable sanctions, including institutional and personnel penalties, and large monetary fines. Total collective fines are speculated to reach into the hundreds of billions of won.
- Timeline and Context: With four major exchanges still awaiting a decision (Korbit, GOPAX, Bithumb, and Coinone, though Bithumb may be delayed), the sanctions process is expected to continue through the first half of next year. This enforcement drive coincides with:
- Renewed uncertainty over South Korea's long-delayed crypto tax regime, which officials warn may face a fourth postponement past the scheduled January 2027 date.
- Policymakers simultaneously attempting to balance regulation with innovation, as the ruling party recently launched a task force aimed at fostering growth in digital assets.
November 2025, Cryptoniteuae