A South Korean court has overturned a three-month suspension imposed on crypto exchange Upbit operator Dunamu, citing gaps in anti-money laundering rules.
The Seoul Administrative Court ruled in favour of Dunamu, cancelling a sanction issued by the Financial Intelligence Unit over alleged compliance failures tied to smaller transactions.
The court found that while rules for transfers above 1 million won were clear, guidance for smaller transactions lacked specificity, weakening the legal basis for enforcement.
The decision also noted that regulators failed to clearly define required compliance measures, making it difficult to conclude that Dunamu acted with intent or gross negligence.
The case stemmed from a February 2025 penalty that restricted new Upbit users from transferring digital assets following an inspection that identified over 600,000 suspected KYC violations.
The ruling narrows the FIU’s ability to impose sanctions where compliance standards are not clearly defined, potentially forcing regulators to strengthen guidance before enforcement.
The outcome ends a year-long legal dispute and highlights ongoing challenges in applying AML frameworks to crypto exchanges in South Korea.