Upbit Operator Dunamu Appeals 35.2B Won FIU Fine; Penalty Enforcement Suspended
Dunamu Inc., operator of South Korea’s largest crypto exchange Upbit, has lodged an administrative appeal against a 35.2 billion won (~$26.5m) fine imposed by the Financial Intelligence Unit (FIU) after a November 2024 inspection. The FIU accused Dunamu of breaches of the Act on Reporting and Using Specified Financial Transaction Information—principally shortcomings in AML/KYC transaction monitoring and suspicious-transaction reporting. By formally objecting in early 2025, Dunamu has triggered an administrative review that automatically suspends enforcement of the fine until a court decision. The review will require both sides to submit internal procedures, audit records and expert testimony; a court could uphold, reduce or void the penalty. The dispute follows earlier FIU inspections that flagged compliance gaps across other major Korean exchanges, highlighting systemic AML/KYC weaknesses under tighter post-2022 regulations (real-name bank accounts, enhanced transaction reporting, stricter AML/CFT rules). Short-term, Upbit’s trading services remain operational and there is no immediate service impact. Medium to long-term, a ruling for the FIU may force exchanges to increase compliance spending and could raise user costs, while a ruling for Dunamu may narrow enforcement scope and reduce near-term compliance pressure. Traders should monitor the case for potential effects on market confidence, liquidity on Korean venues and any shifts in exchange fee or listing policies.
Neutral
The immediate operational impact on Upbit is minimal—trading remains available and the fine’s enforcement is suspended during appeal—so there is no direct short-term downward pressure on the price of any specific token listed on Upbit. Market confidence could be dented regionally, but the suspension reduces immediate disruption risk. Longer term, a court ruling upholding the FIU could be bearish for Korean-listed tokens and liquidity on local venues because exchanges may increase compliance costs or tighten services, potentially raising user fees or delisting higher-risk tokens. Conversely, a ruling for Dunamu would be bullish-to-neutral for market sentiment in Korea by limiting regulatory reach and reducing expected compliance costs. Given these offsetting outcomes and the procedural nature of the appeal, the most likely net effect on prices of assets traded on Upbit is neutral until a definitive court outcome or operational change occurs.