Upbit awaits Seoul court ruling on FIU suspension as Korean VASP renewals come under pressure

The Seoul Administrative Court is expected to rule this week on Dunamu’s challenge to the Financial Intelligence Unit’s (FIU) sanctions against Upbit. For high-risk payment and crypto operators, the point is not just whether one exchange keeps part of its business running for three months, but how far the FIU is willing to push penalties across the rest of Korea’s virtual asset market.

1. On the 25th of last month, the FIU imposed a three-month partial suspension of operations on Upbit, running from the 7th to June 6, and also issued a warning against the CEO for violating the Specific Financial Transaction Act. The suspension’s effectiveness has been temporarily halted until the 27th while the court considers Dunamu’s administrative lawsuit and request for a temporary injunction.
2. Dunamu, which operates Upbit, filed for cancellation of the partial suspension and for temporary relief at the Seoul Administrative Court on the 27th of last month. The court held a closed hearing on the 13th and received additional written submissions until the 20th, with the result expected this week. In the hearing, Dunamu argued that the injunction was urgent pending the main lawsuit, while the FIU said the sanction was appropriate and that further disputes would arise in the main case.
3. The FIU’s position is rooted in the Specific Financial Transaction Act, which it says is designed to prevent money laundering and fraudulent transactions using virtual assets. That matters because the agency is also discussing the size of fines to be imposed on Upbit, so the court ruling is sitting inside a larger enforcement package rather than a one-off warning shot.
4. The market is watching because the Upbit case may shape the severity of sanctions against other virtual asset exchanges in Korea. The five major Korean won transaction exchanges are facing renewal of their virtual asset service provider (VASP) status from the FIU this year, and four of them, excluding Gopax, have been found to have the same violations of the Specific Financial Transaction Act as Upbit.
5. Bithumb has been accused of transferring more than 60 million virtual assets, worth about 22.4 billion won, to exchanges that did not receive approval from financial authorities. The industry’s read is straightforward: if the FIU applies the same standard used against Upbit, the remaining exchanges may not avoid severe penalties either.

One detail worth watching for payment providers is that the FIU warning against financial company executives is treated as a severe sanction under the Financial Company Governance Act, which can restrict executives from serving in certain roles. In practice, that is the kind of collateral damage that tends to spill from a compliance case into banking relationships, merchant onboarding, and the willingness of partners to keep exposure to the sector.