On the 9th, the Seoul Administrative Court canceled FIU’s six-month partial suspension on Dunamu as part of its ruling. The court acknowledged that Dunamu had taken some measures in response to regulatory gaps and the lack of concrete guidelines, but did not explicitly determine that those steps were sufficient or appropriate. Dunamu argued that FIU’s sanctions were excessive and lacked a clear legal basis. In the first instance, Dunamu succeeded in overturning the sanctions, but the ruling shows the industry’s autonomous response and the authorities’ regulatory framework remain incomplete.
Crypto exchanges operate under unclear standards and must manage risk on their own, while regulators demand stricter accountability given money-laundering concerns. The reality is that crypto exchanges cannot rely on regulatory gaps as a justification. Upbit and Bithumb were sanctioned for violations of the Act on Reporting and Use of Financial Transaction Information, including failing to block transactions with overseas unreported operators and for weaknesses in customer verification and transaction restrictions. Bithumb’s ghost Bitcoin overpayment incident drew attention to internal-control weaknesses, while Coinone received a three-month suspension for similar issues.
The penalties on Korea’s three major exchanges signal that the market is not yet ready to be treated as trusted financial infrastructure. As corporate virtual asset investments grow and digital asset laws advance, exchanges will be treated as essential financial infrastructure rather than experimental platforms. Even if the court overturns Dunamu’s penalty, market doubts about AML systems and internal controls persist. If exchanges aim for the status and autonomy of financial firms, they must demonstrate robust internal controls rather than blaming regulatory gaps.
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