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Enforcement of a record 35.2 billion won ($25.1 million) fine against Dunamu, the operator of South Korea’s largest cryptocurrency exchange Upbit, has been automatically paused after the company filed a formal legal objection challenging alleged anti-money laundering violations tied to 5.3 million customer verification failures.
The FIU, operating under the Financial Services Commission, imposed the Dunamu Upbit fine in November after concluding that the exchange breached the Act on Reporting and Use of Specified Financial Transaction Information, commonly known as the Specified Financial Information Act.
Regulators said Dunamu failed to properly verify customers in approximately 5.3 million cases.
These included approving accounts using scanned or printed identification documents, accepting unclear or out-of-focus images, and allowing registrations with incomplete personal information.
According to the FIU, roughly 3.3 million transactions occurred before customer verification procedures had been completed.
Authorities also cited 15 cases where Dunamu allegedly failed to submit suspicious transaction reports despite “reasonable grounds to suspect money laundering,” referencing investigations in which prosecutors sought search-and-seizure warrants linked to Upbit users.
Beyond the monetary penalty, regulators issued a business suspension order, making the Dunamu Upbit fine the largest sanction ever imposed under the Specified Financial Information Act.
At a December hearing, Dunamu challenged the regulator’s conclusions, arguing that enforcement actions were unevenly applied across the industry.
The company’s legal representative said similar compliance shortcomings existed at other exchanges but did not result in comparable sanctions.
“Even though other exchanges faced the same issues, only Dunamu was subjected to preemptive action,” a Dunamu legal representative said during the FIU hearing.
Dunamu also questioned whether a business suspension could be justified under Article 8 of the Specified Financial Information Act, which allows fines to be imposed regardless of intent or severity.
By filing its objection, the company has effectively frozen the Dunamu Upbit fine pending court review.
The action against Dunamu forms part of a broader regulatory crackdown on South Korean crypto exchanges.
Following its decision on Upbit, the FIU confirmed inspections of other platforms, including Bithumb, Coinone, Korbit, and GOPAX.
Bithumb was inspected in March 2025 and later fined for AML violations, including failures in customer due diligence and suspicious transaction reporting.
Industry sources suggest Bithumb’s eventual penalty could rival the Dunamu Upbit fine, though no final figure has been announced as of early 2026.
Korbit has already faced sanctions. On December 31, 2025, the FIU fined the exchange 2.73 billion won ($1.9 million) and issued disciplinary measures against senior compliance staff following an inspection that uncovered nearly 22,000 violations.
The FIU described the findings as “serious flaws in Korbit’s AML compliance system,” citing deficiencies in transaction monitoring and reporting of dealings with foreign virtual asset service providers.
For crypto investors, the Dunamu Upbit fine underscores regulatory risk in South Korea’s digital asset market as authorities intensify AML enforcement.
For policy makers, the case raises questions about proportionality and consistency as similar violations surface across multiple exchanges.
If the courts uphold the Dunamu Upbit fine, it could reinforce the FIU’s authority to impose sweeping penalties and business suspensions.
A reduction or reversal, however, may prompt regulators to recalibrate how sanctions are applied across the sector.
Either outcome will shape South Korea’s regulatory posture toward cryptocurrency exchanges at a time of heightened global scrutiny over compliance standards.
