Key Takeaways
- Seoul Administrative Court reversed the three-month partial suspension order targeting Dunamu, the company behind Upbit exchange.
- Judges determined that AML compliance requirements for transactions under 1 million won (approximately $675) lacked sufficient clarity.
- The court concluded that regulators failed to outline specific compliance actions Dunamu needed to implement.
- Evidence showed Dunamu had implemented independent compliance protocols throughout the review period.
- The court found no evidence of intentional violations or severe negligence by the exchange operator.
The Seoul Administrative Court struck down a three-month partial suspension order against Dunamu, which runs the Upbit cryptocurrency platform. This decision concluded a legal battle spanning over twelve months. According to the court’s findings, the Financial Intelligence Unit failed to establish sufficient legal foundation for imposing the penalty.
Regulatory Dispute Centers on Vague Compliance Requirements
The legal challenge revolved around anti-money laundering protocols governing transfers under 1 million won, equivalent to $675. The court noted that regulators had established more precise requirements for higher-value transactions.
Judges determined that the FIU had failed to articulate mandatory compliance procedures with adequate specificity. Because Dunamu had implemented independent safeguards, the court rejected claims of severe negligence.
Regulators issued the suspension order on February 25, 2025, following an on-site examination. The agency alleged that Upbit processed transactions involving unregistered overseas virtual asset service providers.
The FIU also pointed to inadequate due diligence during its evaluation of Upbit’s operating permit. Regulators claimed over 600,000 Know Your Customer violations occurred during their assessment.
Dunamu filed a court challenge and requested emergency injunctive relief to block enforcement. The company publicly confirmed its legal action on February 28.
On March 27, the court approved temporary protection and allowed the platform to continue accepting new account registrations. This preliminary order stayed in effect throughout the full legal proceedings.
The court’s final decision upheld the earlier temporary measure and completely invalidated the suspension. This outcome permitted Upbit to maintain uninterrupted user onboarding operations.
Judges Dismiss Regulatory Arguments on Internal Controls
The ruling examined the FIU’s central assertion that Dunamu maintained insufficient internal oversight mechanisms. Yet judges concluded that regulators had failed to provide explicit compliance directives.
According to the court, Dunamu pursued voluntary measures to satisfy existing regulatory obligations. The decision emphasized that retrospective analysis alone could not establish a material violation.
Judges distinguished between ambiguous regulatory frameworks and provable misconduct. Their assessment found that evidence failed to demonstrate “willful misconduct or gross negligence” by the company.
This conclusion eliminated the legal foundation supporting the FIU’s enforcement action. The court concentrated on how regulations were written and applied in practice.
Yonhap covered the judgment and confirmed it resolved the suspension controversy. The publication documented the case progression from initial inspection through injunction to the final verdict.
The court’s analysis emphasized regulatory precision rather than suggesting AML responsibilities were discretionary. The ruling simply required regulators to demonstrate clearer benchmarks before imposing such penalties.
Upbit retained authorization to register new users following both the injunction and final court decision. The FIU had originally implemented the suspended enforcement measure on February 25, 2025.
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