We got used to having good news coming our way from the South Korean exchange Upbit, even though P&D are only good news if you profit from them, otherwise, not really.
As I learned from 
They have been in a process of renewing their license in South Korea, and the South Korean regulators apparently found many issues, primarily with how they handled KYC. More than half a million cases "with problems", news outlets say.
As someone who hates KYC, I feel sorry for Upbit, but I have my doubts their regulators will.
Now they received a notice to suspend business operations for any new users for 6 months, to which they have a deadline to respond until Monday, and the restrictions (or not, but unlikely), will be imposed from the next day.
Not the kind a notice a business high-ranked official wants to read. The AI helped me imagining the scene.
Note that it doesn't include existing users. For them, it's business as usual.
The problems arise from the other side of the penalties - the fines. According to Korean law, Upbit faces 100m Korean won in fine per case (user that was found with issues regarding KYC). That's above 68k USD per user times half a million (minimum). That's over 34bn dollars.
Obviously, that's a huge amount to pay as a fine for any company. Now, it matters if they get a reduction or what's the payment schedule for this fine. Because I assume they would fight to pay it over time instead of at once, if the law permits it.
In any case, Upbit may be on a shaking ground as a business because of the enormous fine. But we will see more in time. Next week the final decision will be made and restrictions applied (I'm not sure if fines will be set then).
What we are mostly interested in is HIVE, obviously. If I remember well, there were at one time around 120m liquid HIVE on Upbit (out of 464m, including staked HIVE). Not sure how things stand now, but it's by far the biggest amount of liquidity for HIVE in one place. Binance is second, but at a distance.
The good thing is existing users on Upbit are unaffected. The bad thing is the potential uncertainty of the Upbit business if they get slapped with such an enourmous fine, and the impossibility to attract new users for 6 months, if the restriction gets imposed.
The question is what will HIVE holders on Upbit do? Especially the whales, since it is to be expected to have at least a few whales there in HIVE, given the amount of liquidity.
I tend to believe whales will continue to hold. They either know they'll be safe on Upbit or they'll move on to a new home, but they'll hold HIVE. Once getting used to seriously influence the price of a coin, you don't want to give up that power easily.
Smaller players on Upbit for HIVE... I don't know what they will do. They may follow in the footsteps of the whales, being used to the probable profits, or some may get scared and try to get out from a potentially sinking ship, in various ways (by withdrawing to the chain, by moving HIVE to a Binance wallet or another Korean exchange, let's say, or by selling to KRW and withdrawing?). We will see...
This is a big opportunity for other exchanges to list HIVE (particularly from South Korea, which have KRW too), in case there will be an exodus away from Upbit. Otherwise, Binance has the products, the volume, and the desire for more liquid HIVE, judging by the APR offered on Binance Earn for HIVE (now lower, since the volume - and therefore demand - dropped since the pump days).
