South Korea has momentarily revoked Upbit’s three-month restriction on onboarding new customers.
Dunamu has taken legal action against the financial regulator, fighting to reverse the sanction while also requesting an injunction to temporarily suspend the ban.
A court in South Korea temporarily removed the restriction that had stopped Upbit from onboarding new customers for three months.
On February 25, South Korea’s FIU imposed a three-month suspension on deposit and withdrawal activities for newly registered clients.
The FIU previously explained that Upbit’s non-compliance with regulations preventing dealings with unregistered Virtual Asset Service Providers (VASPs) led to the suspension.
Upbit’s parent firm, Dunamu, challenged the FIU’s sanction in court, seeking to lift the partial suspension.
Local media outlet Newsis reported on March 27 that the court approved an injunction, postponing the suspension order until 30 days after a judgment is reached. This ruling allows Upbit to continue registering new clients.
Upbit, South Korea’s largest cryptocurrency exchange, has been operating since 2017.
On October 10, South Korea’s Financial Services Commission (FSC) launched an official investigation into Upbit to determine whether the exchange had engaged in anti-monopoly practices.
The regulator is scrutinizing the exchange not only for anti-monopoly infractions but also for possible violations of Know Your Customer (KYC) guidelines.
On November 15, the FIU announced that it had identified between 500,000 and 600,000 possible KYC violations involving the exchange. Later in the month, the South Korean police confirmed Upbit’s 2019 cyber attack resulting in the loss of 342,000 ETH, was orchestrated by the infamous North Korea-linked Lazarus Group.
While reviewing the exchange’s business license renewal, the regulator discovered potential compliance issues.
In 2018, South Korean regulators officially outlawed anonymous crypto trading for South Koreans.
The updated policy requires users to pass KYC procedures before they can trade cryptocurrencies on platforms like Upbit.
Alongside the other claims, the FIU accused Upbit of engaging in 45,000 transactions with foreign crypto exchanges that were operating without registration.
By engaging in such activities, Upbit violated South Korea’s legal framework under the Act on Reporting and Using Specified Financial Transaction Information.
On October 25, 2024, South Korea implemented enhanced monitoring of international cryptocurrency transactions.
Finance Minister Choi Sang-Mok stated that the South Korean government will enforce a reporting obligation for firms handling digital asset transfers across borders.
The government aims to establish early monitoring mechanisms for cryptocurrency dealings linked to tax evasion and financial manipulation.
At the FIU’s request, Google Play disabled the apps of 17 crypto exchanges in South Korea to align with regulatory requirements.
The FIU stated that it is actively working on restricting exchange availability on both the internet and Apple’s App Store.
