Since the launch of the Lee Jae-myung administration, Oh Kyoung-suk, the CEO of Dunamu, has been the only witness from the virtual asset industry selected for the first National Assembly audit. There had been no witnesses or reference persons related to virtual assets over the past two years, but Oh will appear as the industry's representative to answer questions before the National Policy Committee of the National Assembly.
According to political circles on the 10th, Oh will testify at the Financial Services Commission's audit on the 20th over matters including the "administrative suit for a stay of execution regarding partial suspension of business and restrictions on new customers." Oh is expected to face a range of questions, including: ▲ the administrative suit against the Financial Intelligence Unit (FIU) of the Financial Services Commission ▲ detection of violations of anti-money laundering obligations by the FSC ▲ issues such as rushed listings and delistings ▲ confirmation of involvement by international hackers including North Korea's Lazarus. Typically, the reasons for requesting witness attendance number one or two, but this time there are far more.
The core among these is the lawsuit between Dunamu and the FIU. In February, the FIU notified Dunamu, which operates Upbit, of sanctions for violations including breaching the obligation to prohibit transactions with unregistered overseas virtual asset service providers (VASPs). The FIU said Upbit tolerated transactions with unregistered operators and left money laundering risks unattended. The FIU imposed heavy penalties on Dunamu, restricting the transfer of virtual assets by new customers for three months and issuing a reprimand warning to then-CEO Lee Sir-goo, along with the dismissal of the compliance officer and reporting officer.
Immediately after the FSC's disposition, Dunamu filed a suit with the Seoul Administrative Court to cancel the partial business suspension and simultaneously applied for a stay of execution. The court then granted the stay, so the FIU's sanctions are currently suspended. Dunamu maintains that it fulfilled its legal duties and responsibilities regarding customer due diligence and is expected to actively explain this during the audit.
The criteria for listings and delistings on virtual asset exchanges will also come under scrutiny. Exchanges have said they operate listing reviews and delisting standards based on self-regulation, but at the start of this year a large number of virtual assets with no real value, including the Trump meme coin, were listed, sparking controversy over rushed listings.
The known questions relate not only to Upbit but to the entire virtual asset industry. The acceptance of transactions with unregistered exchanges applies to all four virtual asset exchanges—Upbit, Bithumb, Coinone, and Korbit—excluding Gopax, and the outcome of Dunamu's lawsuit will affect the severity of sanctions on other exchanges. Rushed listings likewise drew warnings from financial authorities when multiple exchanges raced to list first during the speculative meme coin frenzy.
However, Oh was the only person selected as a witness from the virtual asset industry. Previously, the National Policy Committee was expected to summon all virtual asset exchanges, saying it would focus its questions on the decline in investor confidence, but as in the 2022 Terra-Luna incident when then-Dunamu CEO Lee Sir-goo appeared as the industry representative, only Oh was called this time as well. Some say the burden on Oh will be significant, as he has come to represent the industry just three months after taking office in June.
A virtual asset industry official said, "The FIU's sanction on Dunamu is the first case since the Act on the Protection of Virtual Asset Users took effect, and because the legal basis for exchange sanctions and the scope of supervisory authority are unclear, the outcome of the discussion on Dunamu is important for the management strategies of virtual asset exchanges," adding, "Everyone will be watching to see what Oh, who has been in the industry for less than half a year, shows at the audit."