Dunamu, the operator of South Korea’s largest crypto exchange Upbit, has made headlines with its latest move to resolve regulatory issues with the Korea Financial Intelligence Unit (KoFIU). This development comes amid a high-profile legal tussle with the regulator, which had imposed a staggering $24.3 million fine on the company for alleged compliance breaches.
Despite this hefty penalty, Dunamu’s assertion that it has resolved issues underscores its commitment to upholding regulatory standards and protecting its vast user base. With the KoFIU’s decision to finalize the penalty after a thorough review process, the spotlight is on the Upbit operator to demonstrate its dedication to transparency and compliance.
Dunamu Addresses KoFIU’s Regulatory Concerns
According to local reports, Upbit operator Dunamu has announced that it has addressed all concerns raised by the financial regulators, reiterating its commitment to compliance. The company emphasized its dedication to enhancing its compliance framework, stating that it has taken proactive measures to rectify the identified issues and prevent future occurrences. The team noted,
“We have completed proactive measures for investors and will make efforts to prevent recurrence of such violations.”
Amid an ongoing lawsuit with the KoFIU, Dunamu has already highlighted its efforts to strengthen its internal control, enhance employee training, and improve its Know Your Customer (KYC) and Anti-Money Laundering (AML) procedures.
FIU Imposes Hefty Fine on Dunamu: Here’s Why
Earlier today, the FIU imposed a substantial fine of 35.2 billion won, equivalent to $24.3 million, on Dunamu for violating customer identification obligations and other regulatory breaches. The regulatory watchdog found that the company failed to verify the identities of about 5.3 million users and neglected to report 15 suspicious transactions, among other infractions.
Notably, the FIU fined Dunamu for several key compliance failures, including accepting unverifiable identification documents, failing to ensure information accuracy, and facilitating unverified transactions. The company has reportedly accepted photocopies or rephotographed images, instead of original documents, at the time of KYC procedures.
In addition, the platform has also failed to ensure the accuracy of the provided information, with address fields left blank or containing incorrect or irrelevant data. Also, they allowed 3.3 million transactions to proceed without completing the necessary user verification process, breaching obligations to restrict such transactions.
The regulator will finalize the penalty after issuing an advance notice, giving Dunamu over 10 days to submit its response. As Dunamu has already taken proactive measures to address the concerns, it is expected that the matter will be resolved soon with no further issues.
Background- How Did This Dispute Start?
In February 2025, the Financial Services Commission’s affiliate, the FIU, ordered a three-month partial business suspension on Upbit and issued a reprimand to then-CEO Lee Sirgoo. Dunamu subsequently rejected the regulator’s claims and filed a lawsuit, arguing that it had complied with the “travel rule” by properly handling transactions exceeding 1 million won and that the majority of the cited cases involved transactions below the threshold, which were not subject to the same requirements.
The company further emphasized that Upbit has adhered to the Digital Asset Exchange Alliance’s unified compliance framework and utilised Chainalysis tools to bolster transaction monitoring. Additionally, since February, the company has proactively expanded the application of the travel rule and whitelisting to all transactions, regardless of size, while further enhancing its KYC and AML systems.
