Upbit Temporarily Suspends Identity Verification via Resident IDs

Upbit, South Korea’s leading cryptocurrency exchange operated by Dunamu Inc., has temporarily halted identity verification using resident registration cards due to KYC/AML breaches, according to regulatory pressures.

The temporary suspension highlights compliance challenges in the crypto industry, affecting new customer transactions and emphasizing regulators’ stringent oversight while leaving existing user operations mostly unaffected.

Upbit Halts ID Verification Amid KYC Scrutiny

Upbit has temporarily suspended the use of resident registration cards for identity verification. The decision follows regulatory pressures due to large-scale KYC violations involving blurry ID images and improper address data. Lee Sirgoo (이석우), CEO of Dunamu / Upbit, noted, “Upbit is reviewing and taking action on the necessary improvements in response to the financial authorities’ recent sanctions.”

Regulators Impose 3-Month Partial Suspension

The suspension primarily impacts new customer transactions, restricting their ability to transfer crypto. Existing users retain full trading and fiat capabilities, ensuring liquidity remains stable during the suspension period.

The temporary measures are aimed at rectifying compliance issues and mitigating money laundering risks. The regulatory focus on proper identification is intended to foster more robust compliance systems in alignment with legal obligations.

Regulatory Pressure on Upbit Dates Back to 2024

In November 2024, Upbit faced similar warnings from regulators for KYC violations, highlighting a recurring compliance issue. This current suspension underlines a pattern of enforcement escalation by South Korean financial authorities.

Experts suggest that, while primary trading remains unaffected, business model adjustments may be required to ensure future compliance. The market could see a temporary shift in user flows towards other exchanges during the mandated period.