South Korean Court Overturns AML Sanctions Against Upbit Operator Dunamu

A South Korean court has ruled in favor of Dunamu, the operator of the cryptocurrency exchange Upbit, overturning a three-month partial business suspension previously mandated by the Financial Intelligence Unit (FIU). The decision concludes a legal dispute that has spanned more than a year. The legal battle centered on alleged Anti-Money Laundering (AML) violations. The court found that while clear rules existed for transactions exceeding 1 million won (approximately $675), the regulations governing smaller transfers were not specific enough to justify the enforcement of the sanction. The FIU had originally imposed the penalty in February 2025 following an on-site inspection. The regulator claimed that Dunamu had facilitated transactions with unregistered overseas virtual asset service providers (VASPs) and identified over 600,000 suspected Know Your Customer (KYC) violations during a license review. In its ruling, the court noted that the FIU failed to provide specific guidance on the actions required of the exchange. While the court acknowledged that Dunamu's internal measures might appear insufficient in hindsight, it determined that the company did not act with intent or gross negligence, thereby undermining the basis for the sanction. This decision allows Upbit to continue onboarding new users without the restrictions previously imposed. More broadly, the ruling narrows the FIU's ability to levy major AML sanctions against crypto exchanges in cases where underlying compliance standards are not explicitly detailed in practice.