The court battle between Dunamu, which operates the virtual asset exchange Upbit, and the Financial Intelligence Unit (FIU) under the Financial Services Commission is moving to the appeals court. In Feb., after the FIU imposed a partial business suspension on Dunamu, Dunamu filed a suit to contest it, and recently won in the first trial.
According to legal sources, the FIU filed an appeal with the Seoul Administrative Court on the morning of the 30th, challenging the ruling that canceled the sanction against Dunamu.
Earlier, the Administrative Division 5 of the Seoul Administrative Court (Presiding Judge Lee Jeong-won) ruled for the plaintiff on the 9th in Dunamu's suit to cancel the three-month partial business suspension imposed by the FIU.
The case began when, in Feb. last year, the FIU identified alleged violations of the Act on Reporting and Using Specified Financial Transaction Information by Dunamu and its employees and notified the company of a three-month partial business suspension, among other measures.
At the time, an on-site inspection by the FIU found that Dunamu engaged in transactions with unreported overseas virtual asset service providers and violated customer due diligence obligations. Dunamu then filed a main suit seeking to overturn the authorities' disposition along with an application for a stay of execution, and the court granted Dunamu's request, putting the brakes on the suspension.
In the subsequent main suit, the first-instance court found the financial authorities' sanction to be unreasonable. It determined that after the issue arose, Dunamu took its own measures to block transactions with unreported virtual asset service providers by obtaining letters of undertaking from customers and using a virtual asset transaction monitoring system.
The court said, "It is difficult to conclude that these steps were sufficient," but added, "It cannot be deemed that the plaintiff failed to take necessary measures with intent or gross negligence merely because the ex post measures were insufficient."