A court has overturned a three-month partial business suspension that financial authorities imposed on Dunamu, the operator of Korea's largest cryptocurrency exchange Upbit, for allegedly violating the ban on transactions with unregistered virtual asset service providers.
The 5th Administrative Division of the Seoul Administrative Court (Presiding Judge Lee Jeong-won) ruled in favor of the plaintiff on Wednesday in a lawsuit filed by Dunamu seeking to cancel the partial business suspension order issued by the Financial Intelligence Unit (FIU) under the Financial Services Commission.
The FIU notified Dunamu in February last year of a three-month partial business suspension and other penalties, citing violations of the Specified Financial Information Act by the company and its executives. According to the FIU, Dunamu was found to have conducted transactions with overseas unregistered virtual asset service providers and violated customer identification obligations. Dunamu filed a lawsuit seeking to overturn the authorities' decision along with a request for a stay of execution. The court granted Dunamu's request for a stay in March last year.
The court determined that neither willful misconduct nor gross negligence on Dunamu's part—prerequisites for the authorities' disciplinary action—was established. "Specific regulations for transactions under 1 million won were deemed insufficient," the court said. "In the absence of any guidelines from regulatory authorities on specific measures to be implemented, Dunamu took its own measures including obtaining customer confirmations and utilizing monitoring systems."
The Financial Services Commission plans to appeal. "Transactions with unregistered virtual asset service providers are matters that can undermine the anti-money laundering system, so the ruling is regrettable," a Financial Services Commission official said. "We will file an appeal immediately upon receiving the written judgment."
