South Korean Court Voids Upbit Suspension, Citing Regulatory Gaps

The Financial Intelligence Unit (FIU), under South Korea’s Financial Services Commission, accused Upbit operator Dunamu of transacting with unregistered overseas virtual-asset service providers. A license-renewal review also identified more than 600,000 suspected know-your-customer (KYC) violations. The dispute centered on whether rules covering transfers below 1 million won, or about $675, could support anti-money-laundering sanctions, with the outcome set to define the limits of regulators’ authority to penalize exchanges.

On February 25, 2025, the FIU ordered a three-month partial business suspension that restricted new Upbit users from transferring virtual assets. Dunamu filed suit on February 28, and the Seoul Administrative Court granted a stay on March 27. On April 9, 2026, the court voided the penalty, finding that rules and specific guidance for small transfers were inadequate and that it was difficult to prove Dunamu had acted intentionally or with gross negligence.