Korbit, South Korea’s fourth-largest exchange, has been hit with heavy fines by the country’s Financial Intelligence Unit (FIU) for failing to comply with anti-money laundering (AML) and know-your-customer (KYC) regulations. The FIU imposed a fine of $1.9 million on Korbit on December 31, 2025, citing various violations related to weak AML and KYC rules.
The main issues that led to the fine included 22,000 unverified users, dealings with unregistered foreign platforms, and poor risk checks. This enforcement action comes on the heels of similar violations found at Upbit, South Korea’s largest exchange, earlier in the year.
The penalties imposed on Korbit include a fine, a warning to the exchange, and cautions to the CEO and reporting officer. The FIU found several failures in customer due diligence, transaction restrictions, dealings with unreported overseas virtual asset service providers (VASPs), and AML risk assessments for non-fungible tokens (NFTs).
Specifically, Korbit was found to have allowed trading without completing required customer identification procedures in approximately 22,000 cases. The exchange also improperly handled transaction limits and engaged in transactions with unregistered overseas VASPs. Additionally, there were 655 violations related to inadequate money laundering risk assessments, particularly for NFTs.
The FIU has been conducting on-site inspections of major cryptocurrency exchanges in South Korea to ensure compliance with AML and KYC regulations. Korbit was given over 10 days to respond to the findings before the fines were finalized.
These inspections follow a chronological order based on the exchanges’ registration dates, with Upbit being the first to undergo inspection followed by Korbit, GOPAX, Bithumb, and Coinone. The latest enforcement action on Korbit follows fines imposed on Upbit in November for similar violations.
Upbit was fined $25 million for widespread AML and KYC breaches, including instances of failing to verify customer identities properly and unreported suspicious transactions. As part of the penalty, Upbit faced a three-month suspension of virtual asset transfers for new consumers.
Dunamu, the operator of Upbit, is internally analyzing the FIU’s findings on Korbit for accuracy and considering an appeal. Korbit is the latest exchange to come under FIU inspection and face heavy fines for AML and KYC violations. This serves as a reminder to all cryptocurrency exchanges in South Korea to adhere to regulatory requirements to prevent money laundering and ensure customer protection.
