South Korean court blocks regulator order suspending Upbit

A Seoul court this week blocked the financial regulator’s order to suspend Upbit, the country’s largest cryptocurrency exchange operated by Dunamu, saying national cryptocurrency laws do not provide a clear legal basis for a full suspension.

The court found the regulator had not shown existing statutes gave explicit authority to halt the exchange’s operations entirely. The decision focused on statutory wording and how current rules apply to virtual asset service providers.

The ruling stayed the suspension, allowing Upbit to keep customer access to deposits, withdrawals and trading while the legal dispute proceeds through the courts.

The regulator announced the planned suspension citing concerns about the exchange’s compliance with oversight requirements. The court concluded those concerns did not meet the legal standard required to immediately stop Upbit’s services.

The judgment did not resolve underlying allegations against Upbit. It addressed only whether the regulator acted within the limits of existing law when ordering the suspension.

Legal experts noted the case points to gaps in statutes governing virtual asset platforms and said courts may require clearer legislative authority before allowing wide enforcement actions that shut down trading platforms.

Industry participants and users reacted with relief at the immediate outcome, noting that a suspension would have disrupted trading and blocked access to customer funds.

The regulator may appeal to a higher court or pursue other administrative measures supported by statute. Prosecutors and oversight bodies may continue separate investigations into the exchange’s business practices.

South Korea has tightened rules for crypto exchanges after several exchange failures and fraud or security incidents in recent years. Lawmakers introduced requirements for anti-money-laundering controls, user identity verification and registration with financial authorities.