TLDR
- The Seoul Administrative Court annulled the FIU’s three-month partial suspension against Dunamu, which operates Upbit.
- The court said AML rules for transfers below 1 million won, or about $675, were not clear enough.
- Judges found that the FIU did not provide concrete guidance on what compliance steps Dunamu had to take.
- The court said Dunamu had adopted its own compliance measures during the period under review.
- Judges ruled that the record did not prove willful misconduct or gross negligence by Dunamu.
Seoul’s Administrative Court canceled a three-month partial suspension against Dunamu, the operator of Upbit. The ruling ended a legal dispute that lasted more than one year. The court said the Financial Intelligence Unit lacked clear grounds for the sanction.
South Korea, Upbit Case Turns on Unclear AML Standards
The case focused on AML rules for transfers below 1 million won, or $675. The regulator had clearer standards for larger transactions, according to the court.
Judges said the FIU did not define the required compliance steps with enough precision. Dunamu had adopted its own measures, and the court declined to find gross negligence.
The FIU issued the suspension on February 25, 2025, after an on-site inspection. It said Upbit handled transactions with unregistered foreign virtual asset providers.
The agency also cited due diligence failures during its review of Upbit’s operating license. It claimed more than 600,000 Know Your Customer violations during that process.
Dunamu challenged the order in court and sought an injunction against enforcement. On February 28, the company confirmed that it had started legal action.
Then, on March 27, the court granted interim relief and kept new user registrations open. That order remained in place while judges reviewed the broader dispute.
In its final ruling, the court upheld that earlier position and annulled the suspension. The decision closed the case that had allowed Upbit to keep onboarding users.
Court Rejects FIU Case Against Dunamu
The judgment addressed the FIU’s core claim that Dunamu lacked adequate internal controls. However, judges said the regulator had not given concrete compliance guidance.
The court said Dunamu took independent steps to meet its obligations under existing rules. It added that hindsight alone could not prove a serious breach.
Judges also drew a line between unclear standards and enforceable misconduct. They said the record did not show “willful misconduct or gross negligence” by Dunamu.
That finding undercut the FIU’s legal basis for the penalty in this case. The court focused on the wording and application of the AML rules.
Yonhap reported the ruling and said it ended the dispute over the suspension. The report also traced the case from inspection to injunction to final judgment.
The court’s reasoning rested on rule clarity, not on a finding that AML duties were optional. Instead, it said the regulator had to show clearer standards before enforcing this penalty.
Upbit, therefore, kept its ability to accept new users after the injunction and final judgment. The FIU imposed the suspended measure on February 25, 2025.
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