BlockBeats report: On July 19, the Financial Services Commission of South Korea issued an inspection notice to Dunamu, Upbit’s parent company, regarding the November last year hacking incident, officially initiating sanction proceedings. Dunamu disclosed the hacking only after completing its merger activity with Naver Financial on the same day, sparking controversy over delayed reporting. The company subsequently froze and recovered approximately 2.6 billion KRW in assets, while the remaining 38.6 billion KRW in user losses were fully compensated by Upbit’s own funds.
South Korea’s current Virtual Asset User Protection Act focuses on user protection and unfair trading, lacking direct penalties for hackers and system failures; whether this sanction will escalate to severe punishment remains uncertain. The Financial Services Commission has previously acknowledged, “Our penalty authority is relatively limited, but this is not an incident that can be easily overlooked.” Korean financial authorities plan to supplement provisions on sanctions and compensation for hackers and system failures in the second phase of legislation for the Digital Assets Basic Act. After Dunamu completes its explanation process, the Financial Services Commission will finalize the sanction level through votes by the Sanctions Review Committee, the Securities and Futures Commission, and the Financial Committee.