Dunamu, the parent company of South Korea’s leading cryptocurrency exchange Upbit, has recently taken legal action against the country’s Financial Intelligence Unit (FIU) following a business suspension order. This move comes as South Korean authorities are ramping up efforts to combat crypto-related crimes by establishing a dedicated unit to handle digital asset investigations.
According to reports, Dunamu filed a lawsuit with the Seoul Administrative Court on Feb. 28 in an attempt to overturn the sanctions imposed by the FIU. Last November, Upbit was accused by South Korean regulators of failing to conduct proper customer due diligence in hundreds of thousands of cases. As a result, the FIU prohibited the exchange’s new customers from transferring virtual assets on Upbit between March 7 and June 6.
However, Dunamu has challenged this decision, arguing that the penalties will have a significant impact on its operations. The company maintains that it has implemented necessary compliance measures in response to regulatory concerns and believes that the sanctions are disproportionate. Dunamu also claims that the FIU’s actions were taken without fully considering all relevant facts and circumstances.
In a parallel development, the Seoul Southern District Prosecutors’ Office in South Korea has established a specialized Joint Investigation Unit (JIU) to tackle cryptocurrency-related crimes. The unit, consisting of 35 financial regulators and prosecutors from the Financial Services Commission and the Financial Supervisory Service, will focus on investigating and prosecuting crypto-related fraud, theft, and illicit market activities.
The decision to launch this dedicated unit follows the success of a temporary task force set up in 2023 to address the increasing number of cryptocurrency-related offenses. With the complexity of these crimes on the rise, the establishment of a permanent unit aims to enhance enforcement efforts.
Since the inception of the initial task force, prosecutors have pressed charges against 74 individuals and made 25 arrests in cases involving fraudulent schemes and market manipulation. This proactive approach by South Korean authorities underscores their commitment to combating illicit activities in the cryptocurrency space.
As the regulatory landscape continues to evolve, it is crucial for cryptocurrency exchanges and market participants to stay compliant with regulatory requirements and cooperate with authorities to maintain a secure and transparent ecosystem for digital assets.