South Korean Regulator Initiates Sanctions Procedure Against Upbit Over $36M Hack
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- South Korea's FSS has initiated sanctions procedures against Dunamu, operator of crypto exchange Upbit, following a $36 million hack reported in November 2025.
- The regulator is reviewing potential violations of the Virtual Asset User Protection Act and plans to address regulatory gaps.
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South Korea's FSS initiated sanctions against Upbit following a $36 million hack reported in November 2025, with the exchange criticized for delayed disclosure.
South Korea’s Financial Supervisory Service (FSS) has reportedly sent an inspection opinion letter to Dunamu, the operator of crypto exchange Upbit, concerning the $36 million hack from November 2025.
Local news outlet Yonhap News reported Sunday that the FSS had recently sent Dunamu an inspection opinion letter.
The letter marks the formal start of a sanctions procedure by the financial authorities. It provides Dunamu with an opportunity to respond to the inspection’s findings before the regulator notifies the company of its proposed sanctions.
Cointelegraph has approached Dunamu for comment on the matter.
Upbit faced criticism for delaying its announcement of the $36 million exploit, according to Yonhap.
The breach lasted about 54 minutes, starting at 4:42 a.m. KST on Nov. 27, 2026, but Upbit only announced the hack at the end of the day, after a merger-related event involving internet giant Naver Financial concluded.
The financial regulator said it is reviewing whether the exchange violated the Virtual Asset User Protection Act, which provides no direct sanctions provisions related to cyberattacks or computer hacks.
The report said South Korean authorities plan to address the regulatory gap by adding sanctions and compensation provisions for hacking and computer system failures to the second phase of the Digital Asset Basic Act.
Following the November exploit, Upbit said it froze approximately 2.3 billion won ($1.5 million) worth of funds. The exchange’s statement at the time said it would fully reimburse affected customers using its own balance sheet assets.
Upbit said it initiated an overhaul of its crypto wallet architecture to address potential vulnerabilities after the exploit and migrated all assets from affected wallets.
In December 2025, Upbit said it developed an automatic onchain tracking service, Onchain AI Tracer System, to track the path of the stolen funds and aid potential recovery efforts.
Upbit ranks third in CoinMarketCap’s crypto spot exchange rankings, based on scores that include traffic, liquidity and trading volumes. Trading volume for the most-recent 24-hour period was $478.56 million.
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South Korean authorities will add sanctions and compensation provisions to the Digital Asset Basic Act's second phase.
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Offene Fragen
- What specific sanctions will the FSS impose on Dunamu/Upbit?
- How will the Digital Asset Basic Act's second phase address regulatory gaps?
- What was the final outcome of Upbit's fund recovery efforts?
