South Korea Temporarily Lifts Upbit’s 3-Month Ban on Serving New Clients

A local court has temporarily lifted a three-month ban that prevented Upbit, the country’s largest crypto exchange, from onboarding new clients. The decision comes after Upbit’s parent company, Dunamu, filed a lawsuit against South Korea’s Financial Intelligence Unit (FIU) to challenge the sanction imposed earlier this year.

The partial business suspension, originally enacted on February 25, 2025, prohibited Upbit from processing deposits and withdrawals for new users between March 7 and June 6, 2025. The FIU had cited violations of South Korean regulations, specifically Upbit’s transactions with unregistered virtual asset service providers (VASPs), as the reason for the sanction. However, Dunamu sought an injunction to suspend the penalty while the legal battle unfolds, arguing that the restriction unfairly hindered its operations.

According to a report by Cointelegraph, the South Korean court granted Dunamu’s injunction request, effectively pausing the ban. The ruling shifts the enforcement of the FIU’s sanction to 30 days after a final judgment is reached in the ongoing lawsuit. This temporary reprieve allows Upbit to resume servicing new clients immediately, providing a boost to the exchange amid heightened regulatory scrutiny in South Korea’s crypto sector.

Founded in 2017, Upbit has solidified its position as South Korea’s leading cryptocurrency platform, boasting a daily trading volume of approximately $6.7 billion, according to CoinMarketCap data. The exchange’s ability to attract new users had been hampered by the FIU’s action, which stemmed from allegations of 45,000 transactions with unregistered foreign exchanges between August 2022 and August 2024—conduct deemed a violation of the country’s Act on Reporting and Using Specified Financial Transaction Information.

Dunamu’s legal challenge reflects broader tensions between South Korea’s crypto industry and its regulators, who have intensified efforts to enforce compliance with anti-money laundering (AML) and Know Your Customer (KYC) standards. Despite the temporary lift, the outcome of the lawsuit remains uncertain, and Upbit could face further penalties, including potential fines, depending on the court’s final ruling.

For now, Upbit users and prospective clients can breathe a sigh of relief as the exchange regains full operational capacity. The company has yet to release an official statement following the court’s decision, but industry observers expect Upbit to leverage this opportunity to strengthen its market dominance while addressing the compliance issues raised by the FIU.

This development underscores South Korea’s evolving regulatory landscape for cryptocurrencies, with authorities balancing investor protection against the growth of a burgeoning digital asset market.

Source: Cointelegraph, “South Korea temporarily lifts Upbit’s 3-month ban on serving new clients,”