Dunamu Wins Lawsuit to Overturn Business Suspension... Court Says “No Intent or Gross Negligence”

Dunamu Inc., which operates the virtual asset exchange Upbit, has won an administrative lawsuit seeking to overturn a partial business suspension imposed for unreported transactions and insufficient customer due diligence.
On the 9th, Administrative Division 5 of the Seoul Administrative Court, presided over by Presiding Judge Lee Jeong-won of the Seoul Administrative Court’s Administrative Division 5, ruled in favor of Dunamu Inc. in its lawsuit seeking to cancel a partial business suspension imposed by the Financial Intelligence Unit (FIU). The court ordered the cancellation of the three‐month partial business suspension.
The court stated, “It is difficult to regard Dunamu Inc.’s monitoring measures for transactions under 1 million won, which were intended to block unregistered virtual asset business operators, as sufficient to completely block such unregistered operators.” However, it added, “It can be seen that Dunamu Inc. took its own measures in a situation where the regulatory authorities had not provided specific guidance.”
The court went on to say, “Even if Dunamu Inc.’s follow‐up measures were not fully adequate, it is hard to conclude that they amounted to intent or gross negligence,” and added, “Based solely on the facts asserted by the FIU, it is difficult to find that the legal requirements were met, so we determined the sanction to be unlawful.”
Previously, in February last year, the FIU imposed a three‐month partial business suspension on Dunamu Inc., claiming it had violated obligations under the Act on Reporting and Using Specified Financial Transaction Information by transacting with unregistered virtual asset business operators and failing to fulfill customer due diligence requirements. The partial suspension restricted external deposits and withdrawals of virtual assets for new customers.
Dunamu Inc. contested the decision, filing an administrative lawsuit and requesting a stay of execution. The court granted the stay in March last year, effectively halting the enforcement of the sanction. At that time, the court also noted, “It appears that after the sanction, Dunamu Inc. took its own measures to prohibit transactions with unregistered virtual asset business operators.”
The key issue in the case was whether Dunamu Inc. had intentionally or with gross negligence failed to take the measures necessary for anti‐money laundering. If an exchange intentionally or with gross negligence does not take required measures, a business suspension can be imposed. The FIU argued that Dunamu Inc. had not taken sufficient steps to block transactions with unregistered virtual asset business operators.
Dunamu Inc., on the other hand, has maintained that it took the best possible measures. The company argued that it merely transferred virtual assets to designated wallet addresses at users’ request, did not engage in business‐purpose transactions with unregistered operators, and had established and implemented internal control systems. Therefore, it claimed, there was neither awareness of the possibility of transactions with unregistered operators nor a breach of its duty of care.
Bithumb has also received a six‐month partial business suspension for similar reasons. In light of this ruling, attention is now focused on whether it will influence the direction of future sanctions against virtual asset exchanges.

scottchoi15@fnnews.com Choi Eun-sol Reporter