South Korea's Financial Intelligence Unit (FIU) has imposed significant sanctions on the local cryptocurrency exchange Korbit, culminating in a ₩2.73 billion (approximately $1.88 million) fine and an institutional warning. The decision was finalized on December 31, 2025, following a sanctions review committee meeting.
The enforcement action stems from a comprehensive on-site inspection conducted from October 16 to October 29, 2024. The FIU uncovered approximately 22,000 cases of failures in customer due diligence and transaction restrictions. These violations included accepting unclear or missing identity documents, incomplete address information, and using outdated documents for re-verification. In numerous instances, the exchange allowed customers to continue trading even though identity checks were not fully completed.
Furthermore, the inspection identified 655 cases where Korbit failed to conduct mandatory money laundering risk assessments before supporting new transactions, including those involving non-fungible tokens (NFTs). The regulator also found that Korbit facilitated 19 virtual asset transfer transactions involving three overseas Virtual Asset Service Providers (VASPs) that had not completed South Korea's mandatory reporting process, violating the explicit ban on dealings with unreported entities.
In addition to the financial penalty, the FIU imposed personal sanctions on Korbit's leadership. The exchange's chief executive received a formal caution, while the officer responsible for compliance and regulatory reporting was issued a reprimand. The regulator stated that these measures reflect the scale of the violations and management's responsibility.
The FIU emphasized that these lapses represent breaches of core anti-money laundering (AML) obligations under the Specified Financial Transaction Information Act (also referred to as the Specific Financial Information Act), designed to prevent illicit financial activity through virtual asset platforms. The agency indicated that detailed sanction information will be publicly posted after a prior notice and opinion submission process.
This action against Korbit is positioned as part of a broader regulatory push to tighten oversight and strengthen AML standards across South Korea's digital asset sector. The FIU signaled its intent to continue follow-up inspections and impose strict penalties where serious violations are found, stressing that robust compliance is essential for rebuilding market trust.
