FIU Fines Korbit 2.73 Billion Won for Anti-Money Laundering Violations

Korbit, a cryptocurrency exchange currently in negotiations to sell its stake to Mirae Asset Group, has been fined for violating anti-money laundering (AML) obligations.

The Financial Intelligence Unit (FIU), under the Financial Services Commission, announced on December 31 that during a disciplinary committee meeting, it decided to impose a fine of 2.73 billion won on Korbit for violating customer due diligence and transaction restriction obligations, and issued an institutional warning. Disciplinary actions were also taken against related executives and employees, including a caution for the CEO and a reprimand for the reporting officer.

This disciplinary action follows the FIU’s on-site inspection conducted from October 16 to 29 last year, during which Korbit was found to have violated the Act on Reporting and Using Specified Financial Transaction Information (the Special Act). Approximately 22,000 cases were identified in which Korbit failed to fulfill its customer due diligence and transaction restriction obligations as stipulated by the Special Act. In addition, Korbit supported a total of 19 virtual asset transfer transactions with three unregistered overseas virtual asset service providers, thereby violating the prohibition on transactions with unregistered virtual asset service providers. There were also 655 cases in which Korbit failed to conduct a money laundering risk assessment prior to supporting new transactions such as NFTs (non-fungible tokens), thus violating the risk assessment obligation.

The FIU explained, "We comprehensively reviewed the degree, pattern, and motive of the violations to determine the level of penalties imposed today." The amount of the fine publicly disclosed far exceeds the several hundred million won anticipated by the market. The FIU will provide Korbit with a prior notice of the fine, allowing more than ten days for submission of opinions, and will finalize the amount of the fine after considering any opinions submitted.