South Korea's Financial Supervisory Service (FSS) has officially initiated sanctions proceedings against Dunamu, the parent company of Upbit.
15 hours ago
South Korea's Financial Supervisory Service (FSS) has issued an inspection notice to Upbit parent company Dunamu over last November's Upbit hack, officially launching sanctions proceedings. Dunamu only disclosed the breach after completing its merger with Naver Financial that day, sparking a controversy over delayed reporting. The firm subsequently froze and recovered roughly 2.6 billion won in assets, while Upbit’s own funds fully covered the remaining 38.6 billion won in user losses. South Korea’s current Virtual Asset User Protection Act focuses on user protection and curbing unfair trading, but lacks direct penalty clauses for hacks and system incidents, leaving it uncertain whether the sanctions will escalate to heavy penalties. The FSS chief previously stated, “Our penalty authority is relatively limited, but this is not an incident that can be easily dismissed.” South Korean financial authorities plan to add sanctions and compensation provisions for hacks and system failures in the second phase of the Digital Asset Basic Act legislation. The FSS will finalize the sanction level after Dunamu finishes its explanation process, via votes from the Sanctions Review Committee, Securities and Futures Commission, and Financial Commission.
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