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Photo courtesy of Upbit |
[Alpha Biz= Paul Lee] It has been three months since South Korea’s financial authorities imposed partial business suspension on Upbit operator Dunamu for alleged violations of the Act on Reporting and Use of Certain Financial Transaction Information (the “Specific Financial Information Act”), yet no decision has been made on the imposition of a fine.
According to financial industry sources on May 22, the Financial Intelligence Unit (FIU) under the Financial Services Commission (FSC) issued a three-month business suspension in February that restricted Upbit from allowing new customers to transfer virtual assets to and from other exchanges. Dunamu CEO Lee Seok-woo also received a heavy disciplinary warning.
The sanctions were based on violations of the law prohibiting business relationships with unregistered virtual asset service providers.
Despite the elapsed time, the decision on a financial penalty remains pending. The FIU has stated that the fine will be determined through upcoming internal deliberations, but no sanction review meeting has been held to date.
Multiple factors appear to be contributing to the delay. One major reason is Dunamu’s legal response—soon after the suspension was issued, the company filed an administrative lawsuit seeking cancellation of the penalty. The court accepted Dunamu’s request, leading to a temporary suspension of the regulatory action. The FIU is reportedly being cautious, concerned that imposing a fine while a legal dispute is ongoing could create procedural or legal inconsistencies, especially if the court later rules differently.
Some observers also point to political timing as a factor. With a presidential election imminent and potential regime change on the horizon, financial regulators may be hesitant to make controversial decisions. Government restructuring talks have added to the uncertainty. Meanwhile, the FIU has recently completed inspections of other major exchanges, including Bithumb and Coinone, and may be waiting to compare findings before issuing fines collectively.
Alphabiz Reporter Paul Lee(hoondork1977@alphabiz.co.kr)
