Crypto exchange Upbit may face possible sanctions in South Korea for not complying with the country's money laundering and know your customer (KYC) obligations

South Korean crypto exchange Upbit may face sanctions for failing to comply with the country’s money laundering and know your customer (KYC) obligations, a report says.

According to a report by local news site Maeil on Monday, the sanctions were notified to Upbit by the Financial Information Analysis Institute (FIU) under the Financial Services Commission last week.

If the decision is confirmed, Upbit could be barred from new customer related business for up to six months.

“The decision would essentially restrict new customers from transferring virtual assets outside the exchange for a certain period of time,” Upbit told Maeil.

CoinDesk reached out to Upbit and the Financial Services Commission for comment.

The exchange will submit an opinion regarding the sanctions to Upbit to the FIU by the 20th, and the FIU will then review the sanctions.

Earlier this year, South Korean authorities vowed to scrutinize exchanges more closely following the collapse of stablecoin issuer Terra, which brought renewed attention to the regulatory oversight of crypto exchanges.