Upbit Operator Wins Court Battle as Seoul Court Overturns Business Suspension Over Regulatory Ambiguity
After more than a year of legal proceedings, the court ruling concludes a dispute that began when Dunamu challenged the penalty and sought to prevent its implementation.
The Seoul Administrative Court has struck down a three-month partial business suspension order issued by South Korea's Financial Intelligence Unit (FIU) against Dunamu, which operates the cryptocurrency exchange Upbit, local media outlets have confirmed.
According to a Tuesday report from Yonhap News Agency, the court ruled in favor of Dunamu in its legal action challenging the FIU's decision, reversing the penalty that stemmed from purported violations of Anti-Money Laundering (AML) requirements.
The judicial panel determined that while explicit regulations existed governing transactions exceeding 1 million won (approximately $675), the framework covering smaller-value transfers lacked sufficient specificity, thereby undermining the foundation for enforcement action in this particular case.
This decision constrains the FIU's capacity to levy significant AML penalties against cryptocurrency platforms in situations where the applicable compliance requirements have not been articulated with adequate clarity in operational terms. The judgment also brings closure to a legal confrontation that commenced following the FIU's imposition of the penalty in February 2025, which was subsequently suspended by judicial order while Dunamu's appeal remained under consideration.
Court cites lack of guidance in Dunamu decision
In response to the FIU's assertion that Dunamu had failed to implement sufficient measures, the judicial panel noted that the regulatory authority had not furnished clear direction regarding which specific actions were necessary. Within that framework, the court determined that the company had indeed implemented its own compliance measures.
The tribunal stated that even if such measures may appear inadequate when viewed retrospectively, it remains challenging to determine that Dunamu neglected to satisfy its regulatory obligations through intentional conduct or severe negligence, thereby eroding the justification for the punitive action.
FIU sanction triggered a legal challenge from Dunamu
The FIU issued a three-month partial suspension order against Dunamu on Feb. 25, 2025, prohibiting newly registered Upbit users from conducting digital asset transfers.
According to the regulatory body, the enforcement action followed an on-site examination that revealed Dunamu had enabled transactions involving unregistered overseas virtual asset service providers (VASPs) and had not satisfied customer due diligence obligations.
The FIU had earlier stated that its review of Upbit's exchange business license uncovered more than 600,000 potential Know Your Customer violations.
Following the imposition of the sanction, Dunamu initiated legal proceedings and filed for an injunction to suspend its implementation immediately after the penalty was made public. Dunamu announced on Feb. 28, 2025, that it had filed the lawsuit aimed at reversing the partial suspension directive.
The court approved the injunction on March 27, 2025, permitting Upbit to maintain its ability to register new users during the period while the legal matter remained under judicial review.