Personnel sanctions were issued against the CEO and reporting officers.
South Korea’s financial regulator has taken enforcement action against local crypto exchange Korbit. It cites multiple violations of anti-money laundering rules. The decision follows a comprehensive inspection that identified gaps in customer checks. Including transaction controls and risk assessments tied to new crypto-related services.
The Financial Intelligence Unit (FIU) announced that Korbit breached obligations under the Specific Financial Information Act. As a result, the regulator imposed an institutional warning and a fine of 2.73 billion won or about $1.88 million.
The inspection, conducted in late 2024, found that Korbit failed to fully meet customer due diligence standards in a large number of cases. According to the FIU, some users completed verification using unclear or incomplete identification documents. In other instances, the exchange allowed transactions even when customer verification was missing or outdated. The regulator said these practices violated clear rules requiring exchanges to restrict trading until identity checks are properly completed.
Beyond customer checks, the FIU also cited Korbit for allowing transactions with overseas virtual asset service providers. That was not officially reported in South Korea. The exchange reportedly supported 19 transfers involving three unregistered foreign platforms. Which breaches the ban on dealings with undeclared operators.
In addition, the regulator found that Korbit failed to conduct proper money laundering risk assessments. Before launching or supporting new services, including NFTs. The FIU confirmed more than 650 cases where required risk evaluations were not completed in advance. These lapses, regulators said, increased exposure to potential illicit activity. Also, highlighted weaknesses in Korbit’s internal compliance controls.
The enforcement action did not stop with financial penalties. The FIU issued a formal warning to Korbit’s chief executive and a reprimand to the officer responsible for regulatory reporting. The regulator said these measures reflected the scale of the violations and management responsibility. At a sanctions review meeting held on December 31.
The FIU weighed factors such as past enforcement cases, corrective steps taken by Korbit and the seriousness of each breach. After that review, it finalized the fine and institutional warning. The FIU also confirmed that they would publish details of the sanctions after a short comment period. In line with standard disclosure procedures.
The regulator said the action against Korbit signals a broader push to strengthen AML standards across the virtual asset sector in South Korea. Authorities plan to continue follow-up inspections and impose strict penalties where serious violations persist. According to the FIU, improving compliance systems is essential for rebuilding trust in the crypto market.
The agency stressed that exchanges must strengthen internal controls as digital assets expand into areas like NFTs and cross-border transfers. For Korbit, the fine adds to mounting regulatory pressure on Korean exchanges to align more closely with global AML expectations. As oversight tightens, regulators made clear that failures in customer protection and risk management will draw swift consequences.
