South Korea’s FIU Fines Korbit $1.9M for AML Violations

South Korea’s Financial Intelligence Unit (FIU) has taken enforcement action against crypto exchange Korbit after completing a comprehensive anti–money laundering (AML) inspection.

The regulator imposed an institutional warning along with a fine of KRW 2.73 billion (approximately $1.9 million) over violations of the country’s Specific Financial Information Act.

The enforcement action was finalized on December 31, 2025, after the meeting of the Sanctions Review Committee of the FIU. Alongside the fine, the FIU administered a warning to the CEO of Korbit and a reprimand to the executive responsible for the reporting process.

Details of the violations

The on-site inspection took place between October 16 and 29, 2024, and revealed that Korbit continued to violate rules on customer identification and transaction restrictions under the Specific Financial Information Act. Approximately 22,000 transactions were found to lack the necessary compliance measures.

According to the regulator, Korbit completed customer verification using unclear or copied identity documents, allowed accounts with missing or incorrect address information to remain active, and failed to re-verify customers when legally required.

In some cases, users whose money laundering risk levels had increased were allowed to trade without additional checks.

The inspection also revealed about 9,100 cases in which Korbit permitted transactions for customers who had not completed mandatory verification procedures, despite legal obligations to block such activity until checks were finalized.

In addition, Korbit was found to have supported 19 virtual asset transfers involving three overseas crypto service providers that were not registered with South Korean authorities. The FIU said this violated rules that prohibit domestic exchanges from transacting with unreported foreign virtual asset operators.

The regulator then pointed out another 655 violations for the failure to assess risks. Korbit failed to conduct necessary assessments of money laundering risks before launching or supporting new services, including transactions involving non-fungible tokens (NFTs).

Broader market implications

After reviewing the scope and seriousness of the violations, the FIU decided to impose both financial and administrative sanctions. 

The regulator said details of the penalties will be publicly disclosed after a formal notice and comment period, and added that similar inspections and enforcement actions will continue across the crypto sector.

The enforcement action comes amid broader industry developments involving Korbit. Last month, reports began circulating that global crypto exchange Bybit had held early-stage discussions with Korbit’s management over a potential acquisition. 

The news drew attention within the crypto industry as a possible sign of Bybit’s interest in expanding its presence in South Korea through an established local exchange.

Also Read: South Korea Seeks to Cap Ownership Structure of Crypto Exchanges