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Thousands of unverified transactions put local exchanges back in regulators’ sights
South Korea’s crypto watchdog has taken a firm stance against compliance lapses, handing down a hefty fine to local exchange Korbit after uncovering widespread anti–money laundering failures. The country’s Financial Intelligence Unit confirmed it fined Korbit 2.73 billion won, roughly $1.9 million, following a detailed inspection that revealed serious gaps in customer verification and risk controls.
The sanctions were finalized on December 31, 2025, after a review by the FIU’s Sanctions Review Committee. Alongside the financial penalty, regulators issued a formal warning to Korbit’s CEO and reprimanded the executive responsible for regulatory reporting, signaling that accountability extended beyond the balance sheet.
What the inspection uncovered
The violations stem from an on-site inspection carried out between October 16 and 29, 2024. During that period, investigators found that Korbit had processed around 22,000 transactions without meeting basic customer identification requirements mandated under South Korea’s Specific Financial Information Act.
According to the FIU, the problems ran deeper than a few paperwork errors. Korbit reportedly accepted unclear or duplicated identity documents, allowed accounts with missing or inaccurate address information to remain active, and failed to re-verify customers when required by law. In some cases, users whose money laundering risk profiles had increased were still allowed to trade without additional checks.
One of the more serious findings involved roughly 9,100 instances where transactions were permitted even though mandatory verification had not been completed. Under South Korean rules, exchanges are required to block trading activity until those checks are finalized, making this a clear breach of compliance obligations.
Regulators also flagged Korbit for facilitating 19 virtual asset transfers involving three overseas crypto service providers that were not registered with local authorities. Domestic exchanges are prohibited from dealing with unreported foreign platforms, and the FIU said these transactions directly violated that rule.
On top of that, Korbit was cited for 655 cases where it failed to properly assess money laundering risks before launching or supporting new services, including NFT-related transactions. Risk assessments are a key requirement before rolling out new products, and skipping that step raised further red flags for regulators.
A warning shot for the broader market
After weighing the scope and seriousness of the violations, the FIU opted for both financial and administrative penalties. The regulator said full details of the sanctions will be made public after a formal notice and comment period, adding that similar inspections will continue across the crypto sector.
The timing is notable. South Korea has spent the past few years tightening oversight of digital asset platforms, and this case reinforces that enforcement is no longer theoretical. Exchanges are expected to meet the same standards as traditional financial institutions, especially when it comes to AML controls.
The action also comes amid industry chatter around Korbit’s future. Just last month, reports surfaced that Bybit had held early-stage talks with Korbit’s management about a potential acquisition. While nothing has been confirmed, the news sparked speculation about foreign exchanges looking to enter the South Korean market through established local players.
For now, the FIU’s message is clear. Growth, partnerships, and expansion plans won’t matter much if basic compliance falls short. As regulators keep a closer eye on crypto platforms, exchanges operating in South Korea are being reminded that cutting corners on AML can come at a very real cost.
About the Author
Ryan Moore 
David Rich 
Timothy Young