Upbit becomes South Korea’s first cryptocurrency exchange to receive regulator approval

The Upbit platform has become the first cryptocurrency exchange in South Korea to receive approval from the Financial Services Commission (FSC). CoinDesk Korea reports, citing the regulator.

According to the statement, FSC’s Financial Intelligence Unit (FIU) reviewed the business report of Dunama Co., Ltd, the operator of Upbit. Following the review, the agency found the platform to be compliant with the FATF standards.

On August 20, Upbit’s operator was among the first to file a report with the FIU under the Special Payments Act. The bank K-Bank, which partners with the exchange, confirmed that the company uses real-name accounts registered under users’ real names for customer identification.

At present, only six companies have submitted to the FIU the documents required to continue activities related to digital assets. The latest were Korea Digital Exchange (operator of Flybit) and the Korea Digital Asset platform owned by KB Kookmin Bank.

By 24 September 2021, South Korean bitcoin exchanges were required to register with the FSC. To do so, they must meet the department’s requirements, including ensuring compliance with Know Your Customer (KYC) procedures together with partner banks. The banks are reluctant to expand cooperation with trading platforms, fearing additional scrutiny by financial regulators.

According to the Financial Times, within a week 40 of roughly 60 cryptocurrency exchange operators in the country will cease operations due to non-compliance with FSC standards. They must notify customers of possible closure no later than September 17.

Two, at least three platforms have already taken this step — Gopax, Bybit, and Binance. The first said that it is currently negotiating with an unnamed financial institution about “creating a verification account for deposits and withdrawals under real name”. The second and third announced the closure of operations with the South Korean won.

The ruling Democratic Party of Korea has proposed a bill to delay by one year the introduction of capital gains tax on cryptocurrency transactions.

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