Upbit Faces Potential $133 Billion Fine for KYC Violations, Says Korean Lawmaker

South Korean lawmaker Min Byung-deok has claimed that the country’s largest cryptocurrency exchange, Upbit, could face fines of up to 183 trillion won (approximately $133 billion) for alleged violations of anti-money laundering and customer verification laws.

According to an analysis released Wednesday by Min’s office, the Financial Intelligence Unit (FIU) identified 9.57 million individual violations across 10 categories following a regulatory inspection of Dunamu, Upbit’s operator, earlier this year. Of these, approximately 9.34 million were related to failures in Know Your Customer (KYC) compliance.

The FIU has already imposed a three-month partial suspension of business operations and disciplinary action against 10 Dunamu employees — including one executive — but has yet to issue any monetary fines.

Min criticized Upbit’s use of outdated ID images in lieu of re-verification during mandatory KYC renewal cycles, calling it a fundamental breach of compliance obligations. “This demonstrates the exchange’s failure to meet even the most basic legal standards,” he said.

Under Korea’s Specific Financial Information Act, fines for KYC violations are capped at either 30 million won or 100 million won per infraction, depending on severity. However, precedent shows more conservative penalties: NH Bank was fined 12.96 million won for 12 violations, while IM Bank paid just 4.5 million won for one.

By applying these precedents to the Upbit case, Min estimated fines ranging from 45 trillion won to 95 trillion won. Using the legal maximums, total fines could theoretically reach 183 trillion won.

The case evokes parallels to Binance’s $4.3 billion settlement with U.S. authorities in 2023 over AML violations.

Min called the findings “a damning indictment of Upbit’s internal controls and compliance culture,” and criticized regulators for what he described as “negligent oversight.” He warned that the ongoing lack of accountability, even four years after Korea’s crypto AML law came into force, raises questions about the industry's readiness for broader market maturity.

He also urged swift passage of the pending Digital Asset Basic Act, arguing that enhanced compliance and internal controls are foundational to the credibility and long-term growth of Korea’s digital asset sector.