South Korean financial regulators have sent an inspection report to Dunamu, the operator of crypto exchange Upbit, and formally opened sanctions proceedings, according to Yonhap News Agency. The move comes after the company was hit by a hacking incident involving 44.5 billion won. Since the breach, the Financial Supervisory Service, or FSS, has been examining whether Dunamu violated the Virtual Asset User Protection Act. Still, the outcome remains unclear because current rules do not provide direct penalty provisions for hacking incidents or computer system failures. The FSS plans to notify the company in advance of a sanctions recommendation after receiving its explanation, with that document expected to include the level of sanctions under consideration. Any final disciplinary action will then be decided through resolutions by the sanctions review committee, the Securities and Futures Commission, and the Financial Services Commission.
South Korean financial regulators have sent an inspection report to Dunamu, the operator of Upbit, starting a sanctions process, according to Yonhap News Agency.
The step follows a hacking incident in which the company suffered losses of 44.5 billion won. Since the incident, the Financial Supervisory Service (FSS) has been investigating whether Dunamu violated the Virtual Asset User Protection Act. Even so, it is still unclear whether the case will lead to severe disciplinary measures because there are currently no direct punishment provisions covering hacking attacks or computer system failures.
Under the process described in the report, the FSS plans to send the company a prior notice of sanctions after Dunamu submits its explanation. That notice will include the proposed level of sanctions. Final measures will then be determined by resolution of the sanctions review committee, the Securities and Futures Commission, and the Financial Services Commission.
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