S. Korea’s top financial regulator accused of giving special treatment to Upbit

October 29, 2021

At the annual National Assembly audit, South Korean lawmaker Yun Chang-hyun, who had previously announced his plan to propose a new law for the country’s virtual asset industry, called the relationship between Upbit and the Financial Services Commission (FSC) into question. South Korea’s revised Act on Reporting and Use of Certain Financial Information mandated virtual asset exchanges to comply with strict new standards on strengthening information security and anti-money laundering measures by Sept. 24.

Only four exchanges — Upbit, Bithumb, Coinone and Korbit — managed to successfully comply with the new regulations. Upon FSC’s registration of the exchange, Upbit was supposed to commence its know-your-customer (KYC) obligations right away. This did not take place as scheduled, according to the lawmaker. The FSC has been criticized before on its alleged offering of privileges to certain crypto exchanges. A few weeks before the given deadline for exchanges to submit a compliance report to the authorities, nine of Korea’s smaller exchanges held a joint press conference that presented complaints about an unlevel playing field for virtual asset exchanges attempting to meet the FSC’s requirements.

Meanwhile, lawmaker Yun Chang-hyun also alleged there have been suspicious backdoor listings on behalf of Upbit by utilizing its corporation in Indonesia. Upbit rebutted Yun’s claim, saying that “Dunamu (Upbit’s operator) does not own any shares in Upbit Indonesia. The overseas corporation is under a partnership that only shares technical support. A backdoor listing is structurally impossible.”

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