- South Korean court has temporarily lifted a 3-month ban on top crypto exchange Upbit.
- Regulators imposed the ban in February.
South Korea’s cryptocurrency exchange Upbit has received reprieve from the courts, with a three-month ban on the crypto exchange now lifted albeit temporarily.
This relates to an order that had Upbit, the country’s leading crypto exchange, banned from onboarding new clients.
On March 27, 2025, the court lifted the injunction imposed on Upbit’s parent company, Dunamu, allowing the exchange to offer its products and services to new clients.
The company can now resume operations despite the ongoing legal battle with South Korea’s Financial Intelligence Unit (FIU), a division of the Financial Services Commission (FSC).
Upbit and it’s ban in South Korea
Regulators have accused Upbit of regulatory violations, with this seeing the FIU impose the partial suspension on February 25, 2025.
The ban temporarily prohibited Upbit from processing deposits and withdrawals for new customers for three months.
In an announcement, the regulator said the sanction resulted from findings of a peobe carried out in 2024. The market watchdog said it had uncovered significant lapses in Upbit’s compliance with Know Your Customer (KYC) regulations.
The FIU pointed to between 500,000 and 600,000 potential KYC violations, alongside accusations that Upbit facilitated approximately 45,000 transactions with unregistered foreign crypto exchanges. These breaches, regulators argued, violated South Korea’s stringent financial laws, including the Act on Reporting and Using Specified Financial Transaction Information.
Unwilling to accept the penalties without a fight, Dunamu took swift legal action.
The company filed a lawsuit against the FIU on February 27, seeking to overturn the suspension order entirely.
Simultaneously, Dunamu requested an injunction to halt the enforcement of the sanctions pending the lawsuit’s outcome.
What next?
The Seoul Administrative Court sided with Dunamu on the injunction, ruling that the suspension would be deferred until 30 days after a final judgment is reached in the case. This temporary lift allows Upbit to welcome new users and process their transactions, a move that has been met with relief by the exchange’s vast user base and the broader crypto community in South Korea.
The court’s decision underscores the growing tension between South Korea’s cryptocurrency industry and its regulators. Upbit, which dominates the local market alongside competitors like Bithumb, has faced increasing scrutiny as the FSC intensifies efforts to enforce compliance in the rapidly evolving digital asset sector.
As of now, Upbit can breathe a sigh of relief.
However, with the suspension deferred rather than canceled, uncertainty remains as to what the court’s final ruling will be.
