South Korea’s Financial Intelligence Unit (FIU) under the Financial Services Commission imposed an administrative fine of 2.73 billion won on virtual asset operator Korbit and issued an institutional warning, citing violations including failures to meet customer identification (KYC) obligations.

The FIU said on Dec. 31 it held a sanctions deliberation committee meeting and decided on the measures after recognising Korbit’s violations of the Special Financial Transactions Act. It also approved disciplinary measures for related executives and staff, including a caution for the CEO and a reprimand for the reporting officer.

The sanctions follow the FIU’s on-site inspection conducted from Oct. 16 to 29 last year. The inspection found about 22,000 cases in which Korbit violated obligations under the act to verify customer identity and restrict transactions.

It also supported a total of 19 virtual asset transfer transactions involving 3 unreported overseas virtual asset operators, violating rules that prohibit transactions with unreported operators. In addition, 655 cases were found in which Korbit violated relevant obligations by failing to conduct money laundering risk assessments during the process of supporting new transactions such as non-fungible tokens (NFTs).

The FIU said it set the level of sanctions after comprehensively considering the degree and nature of the violations and the motives for them. It plans to issue a prior notice to Korbit of the fine, then finalise the amount after an opinion submission period of at least 10 days.