Key Insights
- FIU confirmed 22,000 cases of customer verification and transaction restriction violations.
- ㈜Corbit was fined 2.73 billion won as its executives faced identity sanctions.
- FIU reported that 655 NFT transactions lacked proper anti-money laundering risk assessments.
Virtual Asset Operator ㈜Corbit Sanctioned For Gaps in Anti-Money Laundering Compliance
Virtual asset business operator ㈜Corbit is facing FIU sanctions. For failing to meet anti-money laundering and customer verification obligations Corbit has been fined 2.73 billion won.
FIU Confirms Violations in Customer Verification and Transaction Restrictions
From October 16 to October 29, 2024, the FIU carried out a thorough on-site inspection of ㈜Corbit, focusing on compliance with anti-money laundering regulations under the Specific Financial Information Act.
During the inspection, the FIU discovered around 22,000 instances where ㈜Corbit failed to enforce transaction restrictions. Many of these cases involved incomplete or incorrectly processed customer verification details.
https://x.com/WuBlockchain/status/2006318002396938399?s=20
For example, some identity documents were unclear or partially blocked. All real name verification certificates were either copied improperly or not submitted at all. These failures went against proper compliance with Article 52 of the Special Act.
Additionally, ㈜Corbit allowed transactions even for customers who had not fully completed verification procedures. This breach violated Article 8 of the Special Act. This mandates restricting of transactions until verification is fully completed.
In addition, some customers did not have detailed addresses recorded. Therefore, most repeated verification processes were not completed within the legally required deadlines. The FIU determined that these lapses increased the potential for money laundering risks.
Another failure involved customers flagged for higher risk of money laundering. Despite elevated risk levels, no additional verification measures have been taken yet. Corbit still allows for continued transactions.
Reporting Failures and NFT Risk Assessment Gaps
Inspite of this, ㈜Corbit also failed to meet reporting obligations under Article 7 of the Special Act. Specifically, three overseas virtual asset operators were not reported, pushing the total of unreported transactions to 19.
This omission also violated the prohibition against transactions with undeclared virtual asset businesses. This is detailed in Article 8 of the Special Act and the Enforcement Decree Article 10, Paragraph 20, Item 4.
Moreover, 655 NFT-related transactions were conducted without performing the required money laundering risk assessments. According to Article 5 of the Special Act, such evaluations must precede new transaction support.
The FIU noted that these gaps increased exposure to potential illicit activity. This shows how susceptible and systemic compliance weaknesses within ㈜Corbit’s operational procedures are.
FIU emphasized the need for all virtual asset operators to reinforce legal compliance systems and anti-money laundering capabilities.
Adding that the failures in reporting and risk assessment were a reflection of broader oversight deficiencies. This behaviour prompted institutional action against both the company and responsible executives
FIU Sanctions and Executive Measures
After completing the inspection, FIU’s Sanctions Review Committee held hearings to determine penalties. Some of the disciplinary considerations included violation severity, voluntary corrective measures, and past compliance records.
FIU settled on an institutional warning on ㈜Corbit and levied a total fine of 2.73 billion won. This decision was arrived at after consultation with the company and opportunity to submit comments on the preliminary fine.
Executives were not spared either. All faced individual sanctions. The CEO received a formal caution, and the reporting officer was issued a reprimand. These measures show accountability for lapses in compliance management.
The FIU has announced that detailed sanction information will be published on its website. Related companies have 10 days to submit opinions before the fine is finalized.
Moving forward, FIU has laid out plans for sequential follow-up inspections to ensure continued compliance among virtual asset operators. The agency even emphasized on stricter monitoring of all anti-money laundering obligations and legal adherence.
The enforcement aims to maintain trust in the virtual asset market. This will ensure that operators will implement verification and transaction restriction systems.
