A South Korean court has canceled the Financial Intelligence Unit’s (FIU) three-month partial business suspension of Dunamu, the operator of crypto exchange Upbit, according to local reports.
Yonhap News Agency reported on Tuesday that the Seoul Administrative Court sided with Dunamu in its lawsuit against the FIU, overturning the sanction tied to alleged Anti-Money Laundering (AML) violations.
The court said clear rules existed for transactions above 1 million won (about $675), but found that regulations for smaller transfers were not specific enough, weakening the basis for enforcement within the case.
The ruling narrows the FIU’s ability to impose major AML sanctions on crypto exchanges where the underlying compliance standards are not spelled out clearly enough in practice. It also ends a dispute that began after FIU imposed the sanction in February 2025, and that was later paused by the court while Dunamu’s challenge was under review.
Court cites lack of guidance in Dunamu decision
Addressing the FIU’s claim that Dunamu failed to take adequate measures, the court said the regulator had not provided specific guidance on what actions were required. In that context, the court found that the company had taken its own measures.
The court said that even if those measures appear insufficient in hindsight, it is difficult to conclude that Dunamu failed to fulfill its obligations due to intent or gross negligence, undermining the basis for the sanction.
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FIU sanction triggered a legal challenge from Dunamu
On Feb. 25, 2025, the FIU imposed a three-month partial suspension on Dunamu, restricting new Upbit users from transferring digital assets.
The regulator said the measure followed an on-site inspection that found Dunamu had facilitated transactions with unregistered overseas virtual asset providers (VASPs) and failed to meet customer due diligence requirements.
The FIU previously said it identified over 600,000 suspected Know Your Customer violations during a review of Upbit’s exchange business license.
In response to the sanction, Dunamu filed a lawsuit and requested an injunction to halt its enforcement shortly after the penalty was announced. On Feb. 28, 2025, Dunamu said it had submitted the case seeking to overturn the partial suspension order.
On March 27, 2025, the court granted the injunction, allowing Upbit to continue onboarding new users while the case was under review.
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