South Korea Lifts Upbit’s Suspension on New Client Transactions

Highlights:

• South Korea has lifted the suspension that the FIU recently imposed on Upbit.
• The FIU had accused Upbit of violating KYC requirements in its transactions.
• Upbit will continue operating as the case continues after the injunction.

A South Korean court has lifted the partial suspension placed on crypto exchange Upbit. The Financial Intelligence Unit (FIU) had imposed a three-month ban on the exchange, preventing new users from depositing and withdrawing funds. The FIU stated that Upbit had violated policies by conducting transactions with unregistered virtual asset service providers (VASPs).

BREAKING: South Korean court temporarily lifted the three-month partial suspension on Upbit, allowing the exchange to resume services for new clients pic.twitter.com/OJhGRVOkFj

— Cam (@CryptoNews_eth) March 27, 2025

The parent company of Upbit, Dunamu, filed a suit to protest the decision and asked for an injunction that would temporarily block the FIU from enforcing the restriction. A local news outlet, Newsis, reported that the court had accepted the request, allowing Upbit to continue serving new customers while the case is ongoing. The suspension will now take effect 30 days after the court reaches a final verdict. Upbit, which was founded in 2017, remains the largest cryptocurrency exchange in South Korea.

FIU Investigations and Allegations Against Upbit

Upbit has been under investigation by the FIU over multiple issues. A possible breach of Know Your Customer (KYC) rules is one of the key issues. According to the agency, Upbit did not properly verify the identities of users, and reports state that there could be 500,000 to 600,000 violations. These concerns were discovered while FIU was reviewing the exchange’s business license renewal. South Korea stopped anonymous crypto trading in 2018 and required all users to pass KYC verification before trading crypto.

Upbit has also been accused by the FIU of allowing 45,000 transactions with foreign exchanges not registered in South Korea. Authorities believe these transactions may contravene the Reporting and Making Use of Specified Financial Transaction Information Act (LOMIPF Act). South Korean Finance Minister Choi Sang Mok has revealed plans to impose a reporting requirement on business entities engaged in international transactions of digital assets.

The government aims to improve oversight to prevent tax evasion and currency-related risks. In line with these measures, South Korea’s Google Play store removed 17 crypto exchange applications after the FIU’s request. The agency is also working with Apple to limit access to unregistered platforms through the App Store and other internet services.

SOUTH KOREA BANS 17 UNREGISTERED CRYPTO APPS ON GOOGLE PLAY

– South Korea’s Financial Intelligence Unit (FIU) has successfully pushed Google to block 17 unregistered cryptocurrency exchange apps from the Google Play Store, including Poloniex, KuCoin, and MEXC.

– Effective March… https://t.co/pSOqdxYM6X pic.twitter.com/eyGhddBcC1

— BSCN (@BSCNews) March 26, 2025

Next Steps After Lifting Upbit’s Suspension

The court agreed to temporarily remove the business restrictions put on Upbit and its parent company, Dunamu. Upbit has been allowed to keep taking on new users and carrying out their transactions for at least 30 days after the final verdict in the main lawsuit. Meanwhile, Dunamu had argued that the penalties imposed on it by the FIU were excessive.

The FIU had previously imposed sanctions on Upbit for reportedly processing transactions with unregistered foreign exchanges without checking the real names. The court had slated the suspension to take effect on March 7 before delaying it to review the case.

In a related development, Upbit has added Wallace (WAL) trading pairs in Korean won (KRW), Bitcoin (BTC), and Tether (USDT). Upbit has not yet confirmed a launch date but said trading will begin when liquidity conditions are met.

Upbit, South Korea's largest crypto exchange, announced the launch of WAL's Korean won, BTC and USDT trading pairs. Walrus, a blockchain storage protocol, announced earlier that it had completed a $140 million financing, and it is from the same development team as Sui.…

— Wu Blockchain (@WuBlockchain) March 27, 2025