The Digital Asset Basic Act (second-phase virtual asset law) has continued to stall in the National Assembly, making a regulatory vacuum inevitable for the time being, and clashes between the virtual asset industry and the financial authorities are expected to continue.
As virtual asset exchanges such as Upbit, Bithumb and Coinone have filed administrative lawsuits one after another against sanctions by the Financial Intelligence Unit (FIU) under the Financial Services Commission, voices are noting that the regulatory vacuum is causing a waste of administrative resources.
The FIU imposed sanctions such as fines amounting to tens of billions of won and partial business suspensions, saying virtual asset exchanges transacted with unregistered virtual asset business operators and violated the customer due diligence system (KYC, Know Your Customer). Virtual asset exchanges filed suits arguing the FIU's sanctions were excessive in the absence of clear rules, and so far the courts have sided with the virtual asset firms.
Dunamu, which operates Upbit, filed a suit to cancel a partial business suspension against the FIU and won in the first trial. The legal community expects the first-trial rulings for Bithumb and Coinone to be similar to Dunamu's outcome.
The second-phase virtual asset law being pushed in the National Assembly is expected to detail regulations on business conduct, delisting standards, and sanctions related to unregistered operators. However, consultations between the ruling party and the government on the second-phase law have been rocky, and the regulatory vacuum is expected to continue for some time.
The regulatory vacuum is increasing the burden on the financial authorities and private firms. The Financial Services Commission (FSC)'s administrative litigation expense rose more than fivefold, from 165.25 million won in 2021 to 900 million won in 2025. The authorities' win rate has not surpassed half from 2023 through last year.
The virtual asset industry could also face setbacks in new businesses if administrative lawsuits drag on. Dunamu and Coinone, which filed suits to cancel partial business suspensions against the FIU, are each in talks on equity acquisition negotiations with NAVER and Korea Investment & Securities Co. (Korea Investment Holdings), respectively.