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Regulator's Clampdown: South Korea Tightens Grip on Crypto with Korbit Fine

South Korea’s Financial Intelligence Unit has imposed a fine of approximately $1.90 million on crypto exchange Korbit for serious compliance breaches.

The penalty, amounting to about ₩2.73 billion, followed an extensive inspection revealing nearly 22,000 violations of anti-money laundering (AML) and know-your-customer (KYC) regulations.

Inspectors discovered that Korbit allowed customers to trade before completing verification and accepted insufficient identity documentation routinely.

Additionally, the investigation pointed out 19 overseas transfers linked to unregistered virtual asset service providers, a violation under Korean legislation.

The regulatory findings highlighted an alarming number of cases—655—where mandatory risk assessments were not conducted, particularly concerning non-fungible token activities.

In response to the findings, the FIU issued formal reprimands to both Korbit's CEO and compliance officer, signaling serious corporate accountability.

As South Korean authorities intensify their scrutiny of crypto exchanges, this incident highlights the growing pressure on platforms to meet international compliance standards.

Market analysts suggest that Korbit is exploring potential investments from Mirae Asset Group, reflecting intrigue in crypto despite the tightening regulations.

Industry experts anticipate that this case will initiate a wave of internal audits across exchanges, aiming to enhance compliance measures and avoid similar penalties.

Korbit, now tasked with rectifying its compliance lapses, must demonstrate significant improvements or face further regulatory scrutiny in the future.