Crypto exchange Korbit accepts regulator’s $2m anti-money laundering violations fine

The South Korean crypto exchange Korbit will not appeal a fine of almost $2 million and an official warning for failing to enforce anti-money laundering protocols.

The Financial Intelligence Unit imposed the fine after an October 2024 investigation uncovered multiple violations of transaction monitoring and customer due diligence rules, the South Korean publication Business Post reported.

“We respectfully and humbly accept the Financial Intelligence Unit’s decision to impose a fine,” Korbit said in a statement.

“Despite the difficult circumstances, we have made this decision to ensure transparency and the healthy development of the crypto market.”

The fine is a major blow for Korbit, South Korea’s first crypto exchange and a former market-leader in the Bitcoin-won market.

The firm’s average daily trading volume has shrunk to just above the $12 million mark this year, representing a mere 0.5% of the South Korean market.

Takeover deal

Korbit is also preparing for a change of ownership, with the securities firm Mirae Asset closing in on a takeover deal.

The gaming behemoth Nexon currently owns a majority stake in Korbit through its holding company NXC. A subsidiary of the telecommunications firm SK owns around a third of Korbit’s shares.

Mirae has reportedly sealed a memorandum of understanding with NXC and SK shareholders for a deal worth between $68 million and $95 million.

But the finer details of the deal are yet to be finalised, the South Korean newspaper Chosun Ilbo reported, with no firm deadline yet agreed.

On-site inspection

The Financial Intelligence Unit conducted on-site anti-money laundering inspections at all of South Korea’s won-trading crypto exchanges in late 2024, unearthing thousands of violations at Korbit and its closest competitors.

In Korbit’s case, the agency said it found around 22,000 violations, including 12,800 cases in which staff had accepted blurred or poorly copied ID documents, or customer registrations without residential addresses.

The unit said Korbit also allowed thousands of people who hadn’t completed full know-your-customer checks to trade crypto.

The regulator also found that Korbit had conducted several transfers with overseas crypto service providers that were not registered with South Korean authorities.

The unit launched a lengthy probe into the violations, which culminated in a disciplinary committee meeting in December.

The committee also issued Korbit’s CEO with an official warning, and reprimanded its compliance chief.

Korbit said it had since “faithfully completed all of the corrective actions” recommended by the unit in a post-inspection report.

“We will use this incident as an opportunity to take the lead in protecting users through increasingly thorough checks,” Korbit said.

Tim Alper is a News Correspondent at DL News. Got a tip? Email at tdalper@dlnews.com.