A South Korean court has temporarily lifted the three-month partial business suspension on Upbit, allowing it to accept new clients while a legal battle is ongoing.
After reaching a judgment, the court granted an injunction that suspended the suspension order for 30 days.
On February 25, South Korea’s Financial Intelligence Unit (FIU) imposed a three-month ban on deposits and withdrawals for new clients of Upbit exchange, citing violations related to transactions with unregistered virtual asset service providers (VASPs). In response, Upbit’s parent company, Dunamu, filed a lawsuit against the FIU to contest the suspension and sought an injunction to lift the ban temporarily. On October 10, the Financial Services Commission (FSC) initiated an investigation into Upbit for potential breaches of anti-monopoly laws, which contributed to the enforcement of the suspension. Established in 2017, Upbit continues to face scrutiny as regulatory actions unfold.
The exchange has been implicated in multiple regulatory violations, including potential Know Your Customer (KYC) breaches and anti-monopoly infractions. The Financial Intelligence Unit (FIU) uncovered between 500,000 and 600,000 KYC violations during its review of the exchange’s business license renewal on November 15. Following the 2018 ban on anonymous crypto trading in South Korea, users must complete KYC procedures to trade on platforms like Upbit. Additionally, the FIU has charged Upbit with violating the Act on Reporting and Using Specified Financial Transaction Information by facilitating 45,000 transactions with unregistered foreign crypto exchanges.
Notably, On October 25, 2024, South Korea’s Finance Minister, Choi Sang-Mok, announced new reporting requirements for businesses involved in cross-border digital asset transactions. This initiative aims to strengthen oversight of cryptocurrency activities and combat tax evasion and currency manipulation. In line with these regulations, South Korea’s Financial Intelligence Unit (FIU) has requested Google Play to block the applications of 17 crypto exchanges, and it is also working to limit access to these exchanges through other platforms, including the Apple App Store.
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