Dunamu, Operator of Upbit, Hit with $24M Fine by South Korean Regulators
South Korean financial watchdogs just dropped the hammer—Dunamu, the powerhouse behind crypto giant Upbit, got slapped with a $24 million penalty. Regulatory flex or justified crackdown? Either way, it’s a costly reminder that even crypto’s golden children aren’t above the law.
Behind the fine: While details remain scarce, insiders whisper about compliance gaps—classic case of move-fast-and-break-things meeting regulators who prefer unbroken things. Dunamu’s response? Probably scrambling lawyers while counting couch-change from last quarter’s profits.
Market shrugs: Traders barely blinked—Upbit’s volumes still dwarf competitors, proving yet again that in crypto, liquidity trumps scandal. Meanwhile, bureaucrats elsewhere are taking notes—nothing inspires regulatory creativity like a nine-figure penalty.
Closing jab: Nothing spices up a dull compliance meeting like imagining finance ministers high-fiving over seized funds. Bonus points if they reinvest it in—wait for it—government bonds.
A long-list of compliance failures
The FIU stated that following its investigations, it found that Dunamu had over 8.6 million violations, and 5.3 million of them involved failures in customer identification procedures. The FIU said Dunamu had accepted photocopies and rephotographed images of identification documents that made it impossible to fully verify users’ identities.
In some cases, customer addresses were left blank, poorly recorded, or not correct at all, while others bypassed mandatory re-verification cycles.
The other 3.3 million violations are connected to Dunamu’s failure to restrict transactions by users who had not completed the required verification process. This is a major breach of South Korea’s financial regulations, which require VIRTUAL asset operators to suspend or limit transactions until identity checks are fully completed.
The FIU added that there were 15 instances of unreported suspicious transactions on Upbit. These involved cases in which there were reasonable grounds to suspect illicit activity, but no report was filed with the financial authority.
Dunamu has been given ten days to submit its comments on the matter before the sanction is formally enforced.
Dunamu still has a regulatory headache
In response, Dunamu said it accepted the regulator’s decision and WOULD improve its systems to protect investors and prevent the same incidents from recurring.
However, the operator and FIU are already engaged in a separate legal dispute.
In March, Dunamu filed an administrative lawsuit seeking to overturn a partial business suspension imposed in February for conducting transactions with unreported virtual asset operators.
The suspension, which restricted new users from making crypto deposits and withdrawals, was temporarily halted after a court granted a stay of execution later that month.
Operators wary of being on the regulator’s wrong side
The watchdog said in a statement that “The FIU will continue to review and inspect the legal compliance systems of virtual asset operators.” It added that if it discovered any violations, it would take “strict measures in accordance with relevant laws.”
The FIU’s actions send a clear message that no one is immune from tough enforcement, and the latest fine on Dunamu may prompt other domestic platforms, such as Bithumb and Coinone, to conduct internal reviews of their customer due diligence processes and ensure that they are and have been compliant.
If they haven’t, then they may soon be making headlines for the punitive measures the regulator may impose on them for their non-compliance.
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