Korbit, South Korea's first exchange, fined $2 million: KYC violations, market share drops to 0.5%

【BlockBeats】Korean veteran exchange Korbit has recently encountered a series of issues. On January 13, the Financial Intelligence Unit (FIU) issued a fine of nearly $2 million and also issued a formal warning. Korbit chose to accept the penalty and waived the right to appeal.

The reason for this penalty is not unfamiliar—anti-money laundering issues. During an investigation in October last year, regulators found multiple violations in Korbit’s transaction monitoring and customer identity verification. Specifically, Korbit made several mistakes: accepting vague or incomplete identification documents, allowing accounts without a registered residential address to sign up, and permitting users who had not completed full KYC verification to participate in trading. There were over 22,000 violations in total. Even more outrageous, Korbit also had financial dealings with some overseas crypto service providers not registered in Korea.

In an official statement, Korbit said it “respects and accepts” the decision and claimed to have completed rectification measures. However, data shows that this Korean’s first crypto exchange is indeed having a tough time—its current average daily trading volume is only about $12 million, and its market share in the domestic market has shrunk to around 0.5%.

Adding to the difficulties, Korbit’s ownership structure is also changing. Mirae Asset is pushing forward with plans to acquire the exchange, with an estimated purchase price between $68 million and $95 million, though the final details are yet to be finalized. For Korbit, it faces the dual challenge of rectifying compliance issues and dealing with ownership changes, so the road ahead will not be smooth.