Recently, South Korean cryptocurrency exchange Korbit announced that it would accept an anti-money laundering (AML) penalty of nearly USD 2 million imposed by the country’s Financial Intelligence Unit (FIU), and waive its right to appeal. The case has drawn widespread attention across the industry and once again placed KYT (Know Your Transaction) at the center of compliance discussions.
According to regulatory disclosures, Korbit was found to have systemic deficiencies in transaction monitoring and customer due diligence (KYC). These included accepting unclear or incomplete identification documents, allowing account registration without residential address information, permitting users to trade before completing full KYC procedures, and engaging in fund transfers with overseas crypto service providers not registered in South Korea. The total number of violations reached approximately 22,000 cases—far beyond isolated procedural oversights, and instead indicative of sustained transaction risk mismanagement.
From a KYT perspective, such issues cannot be addressed through manual review or KYC alone. Traditional KYC focuses on “who the user is,” whereas KYT focuses on “what the user does on-chain, where the funds come from, and where they go.” Even when identity documents appear compliant, if transaction behavior is linked to high-risk addresses, unregistered service providers, mixing services, or abnormal fund flows, exchanges remain exposed to significant money laundering risks.
The Korbit case clearly demonstrates that the absence of effective KYT capabilities leads to three major consequences.First, regulatory risks materialize rapidly, resulting in substantial fines and formal warnings.Second, business performance suffers: Korbit’s average daily trading volume has declined to approximately USD 12 million, accounting for only about 0.5% of the domestic market.Third, corporate valuation and ownership structures are affected. Reports indicate that Mirae Asset is in talks to acquire Korbit at a discounted valuation range, with compliance shortcomings emerging as a key factor.
For crypto exchanges, wallet providers, and payment institutions, KYT is no longer a “nice-to-have” feature—it is a baseline requirement for survival. A mature KYT system should provide the following capabilities:
- Real-time on-chain transaction monitoring and risk scoring
- Identification of high-risk addresses, sanctions exposure, darknet activity, and fraud-related links
- Fund flow tracing and behavioral pattern analysis
- Automated risk controls integrated with KYC and account management systems
- With KYT in place, platforms can intercept high-risk transactions before or during execution, rather than reacting passively after regulatory investigations begin.
- Korbit’s penalty is not an isolated incident, but a signal of a broader regulatory trend. As global oversight shifts from identity-based compliance to behavior-based compliance, those who invest early in building robust and scalable KYT capabilities will be the ones to survive regulatory cycles—and earn long-term trust premiums. For institutions expanding their operations or preparing for regulatory scrutiny, now is the critical window to deploy professional KYT solutions.