Upbit preemptively blocks Huiwon exchange in Cambodia…strengthens anti–money laundering monitoring

Dunamu, the operator of domestic cryptocurrency exchange Upbit, said on the 2nd that it preemptively detected the risk of money laundering through Cambodia's Huiwon Exchange, became the first domestic exchange to block coin transfers (deposits and withdrawals), and took the lead in preventing crimes.

Upbit detected the possibility of criminal funds being laundered using Huiwon Exchange through its own monitoring in March and strengthened its monitoring system. In this process, it froze funds and carried out enhanced customer identification procedures and suspicious transaction reporting for 259 users who transferred or attempted to transfer virtual assets between Huiwon and Upbit. Of these, 205 users who refused to explain the source of funds or gave insufficient answers were notified of account termination in September.

This tough measure by Upbit was a proactive response two months before the U.S. Financial Crimes Enforcement Network (FinCEN) designated Huiwon as a company of concern for money laundering. In particular, Upbit's swift action is said to have contributed to early blocking of criminal funds entering the domestic virtual asset market and to preventing damage.

Last year, the total volume of coin transfers between the country's five major virtual asset exchanges (Upbit·Bithumb·Coinone·Korbit·GOPAX) and Huiwon Exchange was calculated at 12,806,450,000 won. Upbit reported measures related to Huiwon to financial authorities in March and filed a report with the police.

In October, the police executed a search warrant on Upbit to obtain records of virtual asset transfers by Huiwon users; however, this was a measure taken in accordance with the legal procedures necessary for Upbit to submit customer information to investigative agencies.

An Upbit official said, "We were the fastest among domestic exchanges to block coin transfers with Huiwon and are actively cooperating with the police investigation. We will do our best to minimize harm to Koreans and prevent related crimes."