Upbit returns to South Korea after appealing work ban
Upbit wins court injunction against FIU’s three-month business ban.
South Korea’s largest crypto exchange, Upbit, secured a critical legal win after the Seoul Administrative Court temporarily suspended a three-month business restriction imposed by the country’s Financial Intelligence Unit (FIU).
The court’s decision allows Upbit to continue accepting deposits and withdrawals from new users, at least until 30 days after the conclusion of a pending lawsuit brought by Upbit’s parent company, Dunamu, reports BeInCrypto.
Court Sides With Upbit in Dispute Over FIU Sanctions
The emergency injunction was granted by the 5th Administrative Division of the Seoul Administrative Court, led by Judge Soonyeol Kim, following a formal challenge from Dunamu. The company argued that the FIU’s penalty—stemming from alleged violations of South Korea’s Special Financial Transactions Act—was overly harsh and failed to consider the operational impact.
The FIU’s original sanctions accused Upbit of facilitating crypto transactions with unregistered overseas exchanges that lacked real-name verification protocols. These violations were discovered during an anti-money laundering audit conducted between August and October 2023.
In response to the allegations, Upbit stated it “deeply sympathizes” with the authorities’ intent to strengthen anti-money laundering standards, but maintained that the disciplinary actions were disproportionate.
Regulatory Pressure and Market Implications
The suspension of Upbit’s new-user restriction, originally slated to take effect on March 7, provides temporary relief for the exchange as it awaits the outcome of the main lawsuit. The court’s ruling allows Upbit to continue onboarding users and processing transactions without interruption during this period.
The legal battle comes amid a broader regulatory crackdown on virtual asset service providers in South Korea. Just last week, the government ordered Google to block access to 17 unregistered foreign crypto exchanges, a move that reduces competition and potentially boosts Upbit’s market share.
Upbit has faced mounting regulatory scrutiny in recent months, including temporary suspension orders related to Know-Your-Customer (KYC) violations and an earlier antitrust investigation. The current ruling offers a strategic advantage, enabling the exchange to maintain momentum in a consolidating market.
In parallel with the legal developments, Upbit also announced the listing of new Wallace (WAL) trading pairs with Korean won (KRW), Bitcoin (BTC), and USDT, signaling continued product expansion despite the regulatory headwinds.
While the court’s decision grants Upbit some breathing room, the final outcome of the main lawsuit will determine whether the FIU’s sanctions stand or are permanently overturned. The ruling is likely to set a precedent for how South Korea handles enforcement actions against major crypto platforms going forward.
Recently we wrote, that Google Play has restricted access to 17 unregistered overseas cryptocurrency exchanges in South Korea, following a formal request from the country’s Financial Intelligence Unit (FIU).
