The Korea Financial Intelligence Unit is preparing penalties for major local crypto exchanges, including Korbit, Gopax, Bithumb, and Coinone, following a 35.2 billion KRW fine imposed on Upbit over regulatory violations.

Previously, the FIU issued a disciplinary warning and a three-month CEO suspension for Dunamu over Special Financial Transactions Act violations, and further penalties on other exchanges are expected to total hundreds of billions of won, subject to variation.

The FIU fined Upbit, Bithumb, Coinone, Korbit, and Gopax for AML violations, with Upbit facing the most scrutiny for more than 700,000 KYC violations.

Regulatory efforts to protect investors and strengthen AML controls include planned cross-border transaction disclosures and token issuance oversight in 2025.

Regulatory pressure also creates opportunities for startups, including KYC/AML automation, Compliance-as-a-Service, data-sharing for FATF Travel Rule compliance, custody and insurance solutions, and tools for compliant stablecoin issuance.

European crypto SMEs should pursue MiCA licenses, bolster AML programs to EU standards, document transactions meticulously, adopt compliance tech, and actively engage with regulators for timely oversight.

The regulatory framework tightens under the Virtual Asset User Protection Act, effective since mid-2024, expanding FSC and FIU authority to oversee and sanction virtual asset service providers.

In Asia, stringent AML enforcement can boost credibility, investor confidence, crime prevention, efficiency through compliance tech, and industry collaboration, fostering a more stable regulated market.

Penalties could shrink the current 70–80% market dominance of top exchanges, creating openings for smaller, compliant players.

Penalties are expected to align with Dunamu’s sanctions in size and nature and should be finalized in the first half of the following year using a first-in, first-out enforcement approach based on prior inspections.

FIU on-site inspections since last year reviewed AML and KYC compliance across Upbit, Bithumb, Coinone, Korbit, and GOPAX, with most inspections completed and sanctions under legal review.