South Korean crypto exchange Korbit has just been heavily fined by the Financial Intelligence Unit (FIU), accepting a penalty of nearly $2 million and has no plans to appeal. This matter is quite serious—by October 2024, the FIU conducted on-site anti-money laundering inspections across all fiat-to-crypto exchanges in Korea, uncovering approximately 22,000 violations on Korbit alone, which was quite shocking.

What exactly were the issues? They mainly fall into two categories: first, over 12,800 identity verification documents were blurry or improperly copied; second, some users were allowed to trade without completing KYC. These are hard violations of anti-money laundering compliance, leaving no room for negotiation.

Korbit’s official stance is quite reasonable. They stated, "Respect and humbly accept the FIU’s decision, to ensure transparency and healthy development of the crypto market," and added that all corrective measures have been completed. It sounds a bit like PR, but from their actions, they have indeed addressed the issues.

However, the current situation isn’t very favorable for the exchange. As Korea’s first crypto exchange, Korbit once enjoyed great prominence, but now its market share has fallen to 0.5%, with an average daily trading volume of only about $12 million. For an exchange, that’s already a pretty awkward size.

It’s worth noting that financial giant Mirae Asset is pushing forward with acquiring Korbit, with bids ranging from $68 million to $95 million. Will this penalty become a factor in the deal? We’ll have to keep watching.