South Korea’s Financial Supervisory Service has opened a formal case against Dunamu, the operator of Upbit. The Upbit hack sanctions process follows the wallet breach reported in November 2025. Regulators are reviewing whether the exchange met its statutory duties fully.
The action follows a months-long inspection under the Virtual Asset User Protection Act. The review examined Upbit’s security controls and response. It also covered customer protection after the breach.
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How the Upbit Hack Sanctions Review Will Proceed
According to an SBS report, the FSS sent Dunamu an inspection opinion letter. The document allows the company to answer the findings. No penalty has been proposed yet.
The 27 November attack compromised Solana-based tokens on Upbit. Estimates of the amount of lost money were around $36 million. Further estimates came out at 44.5 billion won ($32 million).
Upbit revealed unusual activities of transferring money from their wallets to cold storage and the suspension of deposits and withdrawals until tracing of the theft had been completed.
Upbit said it would reimburse all of its customers’ losses from its own funds. Later, the incident was assessed by the authorities, including the timing of Upbit’s disclosure.
The review of Upbit hack sanctions incident now relies on the submission from Dunamu, which would be assessed prior to issuing advance notice. The potential sanction level is unknown at present.
South Korea Reviews Upbit Sanctions
The South Korean regulatory body has jurisdiction over matters of custody and customer protection. Moreover, there is jurisdiction over unfair trading practices in crypto markets. However, it sets no direct penalties for hacking or system failures.
Thus, the legal ambiguity regarding the regulatory body’s course of action is evident. The FSS may still rely on compliance jurisdiction. The decision should go through several levels of formal reviews.
The Upbit hack sanctions case will start in the sanctions review committee. The next step is the Securities and Futures Commission. After this, the Financial Services Commission should take a look at the final decision.
Government is planning to introduce new regulations related to hacking cases and technological malfunctions. They might be included in the next phase of digital asset regulations. The current case is regulated by current legislation.
Why Dunamu Awaits Multiple Regulatory Decisions
Dunamu faces another enforcement action. The Financial Intelligence Unit imposed it on a 35.2 billion won fine. This case was about failing to prevent money laundering and client verification.
Upbit hack sanctions process coincides with Dunamu’s plan to conduct a share swap with Naver Financial. Companies postponed it to December 31. Some regulatory approval is still needed.
The inspection process itself does not stop a transaction from being conducted. However, now there are several regulatory processes that involve Dunamu. It has an option to appeal before a decision is made.
The penalty for the hacking case hasn’t been announced yet by FSS. First of all, the company has to respond to the results of the inspection. The Upbit hack sanctions outcome will depend on the remaining reviews.
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