In a stunning regulatory crackdown, South Korean authorities have imposed a three-month partial suspension on Dunamu, the company behind Upbit, the country’s largest cryptocurrency exchange.

The Financial Intelligence Unit (FIU) issued the punitive measure on Tuesday, citing Dunamu’s “violation of the obligation to prohibit transactions with unreported virtual asset operators.”

The suspension delivers a significant blow to the exchange, which currently dominates the South Korean crypto market with a daily trading volume of $6.7 billion, more than double that of its closest competitor, Bithumb, which handles $2.8 billion according to CoinMarketCap data.

While existing Upbit customers can breathe a sigh of relief as they will still be able to trade cryptocurrencies on the platform, the suspension specifically blocks new customers from transferring crypto assets on the exchange during the three-month penalty period.

In response to the regulatory action, Upbit acknowledged the situation in an official statement: “Upbit is reviewing and taking action on the necessary improvements in response to the financial authorities’ recent sanctions.”

This development highlights South Korea’s increasingly strict stance on cryptocurrency regulation and compliance, signaling that even the country’s largest exchanges are not immune to regulatory enforcement.