In a move that has echoed across the cryptocurrency market, Dunamu, a partner of renowned exchange Upbit, has been subject to a three-month partial suspension in South Korea. The decision, announced by the Korea Financial Intelligence Unit (KoFIU), sheds light on the growing regulatory scrutiny in the digital asset sector.
The reason behind the suspension lies in an alleged “violation of the company’s obligation to prohibit transactions with unreported virtual asset operators.” In simple terms, Dunamu allegedly failed to prevent unregistered users from conducting transactions on the platform, which is contrary to South Korean regulations.
Upbit, in turn, released a statement informing that the suspension prevents new customers from entering to make cryptocurrency transfers. However, users already registered will be able to continue trading normally. The company also stated that it is “reviewing and taking steps for necessary improvements in response to recent sanctions from financial authorities.”
“This sanction is a partial suspension of business that prohibits new customers from transferring virtual assets, as a sanction measure based on findings from an on-site inspection conducted by the Financial Intelligence Unit (FIU) in 2024. Upbit has reviewed the necessary improvements in response to the recent sanctions by financial authorities and completed the measures,” highlighted.
The news sent shockwaves through the market, considering that Upbit is South Korea’s largest cryptocurrency exchange with a daily trading volume of over $6.7 billion. The suspension raises questions about the impact the move will have on the platform’s trading volume and investor confidence.
“The sanctions imposed this time may be subject to change through procedures in accordance with relevant regulations, and if the effect of the relevant measures is suspended or terminated, we would like to inform you that new members will also be able to use Upbit’s services without restrictions.”
South Korea has been increasingly strict in regulating the cryptocurrency market, seeking to ensure investor safety and prevent illicit activities. Dunamu’s suspension serves as a warning to other exchanges and companies in the sector, highlighting the importance of complying with regulatory standards.
Despite the partial suspension, Upbit remains one of the world’s leading exchanges. The company has already announced that it is taking steps to correct the flaws highlighted by KoFIU and ensure compliance with regulations.