Court Sides With Dunamu in FIU Sanction Case...What It Means for Other Exchanges [Crypto Briefing]

[Financial News] A court has overturned a partial business suspension imposed on Dunamu by the Financial Intelligence Unit (FIU), effectively siding with Dunamu. As other virtual asset exchanges are also heading into administrative lawsuits against the FIU, this ruling is expected to serve as an important reference point. Legal experts predict that those cases will likewise center on whether there was intent or gross negligence.
The Seoul Administrative Court’s Administrative Division 5, presided over by Presiding Judge Lee Jeong-won of the Seoul Administrative Court’s Administrative Division 5, ruled on the 9th in favor of Dunamu in its lawsuit seeking to cancel the FIU’s partial business suspension. The court held that "the plaintiff’s intent or gross negligence has not been established."
The key issue was whether Dunamu had acted with "intent or gross negligence." The FIU had previously concluded that Dunamu violated the Act on Reporting and Using Specified Financial Transaction Information by engaging in transactions with unregistered overseas virtual asset service providers, and in February last year imposed a three‐month partial business suspension. Under the Act on Reporting and Using Specified Financial Transaction Information, unlike simple administrative fines that can be imposed for violations, a business suspension requires a finding of both intent and gross negligence.
Dunamu consistently denied any intent or gross negligence during the trial. It stressed that even though there were no legal regulations at the time on transactions under 1 million won, it had taken necessary steps such as obtaining "customer undertakings" and operating a "virtual asset transaction monitoring system." It argued that some transactions with unregistered providers occurred due to shortcomings in the system, and therefore could not be viewed as intentional violations.
The court of first instance accepted Dunamu’s arguments. The bench stated, "Even though the regulators provided no specific guidance on the concrete measures Dunamu was required to implement, it can be acknowledged that Dunamu took its own measures," adding, "The fact that those measures later proved insufficient does not mean that Dunamu intentionally or with gross negligence failed to take the necessary steps."
The ruling is expected to play a significant role in administrative lawsuits involving other exchanges. Bithumb, like Dunamu, has been hit with a six‐month partial business suspension and other sanctions by the FIU for alleged violations of the Act on Reporting and Using Specified Financial Transaction Information, and has filed an administrative suit to challenge the decision. Coinone has also received prior notice of a three‐month partial business suspension for alleged violations of the same Act, though it has not yet decided whether to contest the sanction.
In Bithumb’s upcoming administrative lawsuit, the court battle is expected to focus on "the effectiveness of the measures implemented at the time." Bithumb is likely to argue, as Dunamu did, that it took necessary steps to comply with the law even amid a regulatory vacuum, and to categorically deny any intent or gross negligence.
The FIU, for its part, is expected to challenge the effectiveness of those measures. In fact, when it notified Bithumb of the partial business suspension and other sanctions on the 16th of last month, the FIU stressed that "despite repeated reminders of the need to comply with the law, Bithumb failed to take 'effective blocking measures,' demonstrating a markedly weak commitment to legal compliance."
Attorney Kim Byung-kook of Beonhwa Law Office predicted, "Bithumb is likely to argue that, despite the lack of clear regulations at the time, it faithfully implemented internal security systems, customer due diligence (KYC), and anti‐money laundering (AML) measures," adding, "The FIU will probably scrutinize the effectiveness of those measures and, at the same time, compile cases where, even amid the regulatory vacuum, authorities or bodies such as the Digital Asset eXchange Association (DAXA) issued recommendations on legal compliance, in order to argue that there was intent or gross negligence."
The ruling has also fueled expectations that the legislative process for the General Act on Digital Assets will accelerate. Since the dispute itself stems from a regulatory vacuum, many say it underscores the need for clear rules. Kim Byung-kook noted, "Regulation of virtual assets has remained ambiguous, so there is still a sense of confusion when it comes to specific issues," and added, "I expect this decision will speed up the legislative process."
Meanwhile, the Financial Services Commission announced on the 30th of last month a draft amendment to the Enforcement Decree of the Act on Reporting and Using Specified Financial Transaction Information that would extend the scope of the information‐sharing obligation under the travel rule to transactions under 1 million won. The draft will be open for public comment and related rule changes until May 11, after which the remaining procedures will be completed with a view to finalizing the amendment in July.

yimsh0214@fnnews.com Reporter Lim Sang-hyuk Reporter