A court in South Korea has issued an injunction on the partially suspended operations of Bithumb, bringing some reprieve for the cryptocurrency platform. The order will allow Bithumb to operate on a limited basis among new customers while its legal fight with the authorities is still ongoing.
Bithumb obtained a temporary stay of the Financial Intelligence Unit’s order from the Seoul Administrative Court. According to a local media report, the injunction will be maintained until the conclusion of the case at the court.
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Bithumb Challenges Regulatory Sanctions
This action was taken by the FIU based on their findings of roughly 6.65 million violations of the Financial Information Act, which involved deals made with non-registered virtual asset service providers. They also suggested imposing a penalty of about $25 million with the suspension.
The ban is to be valid until the end of September. During this period, no new customers would be allowed to deposit funds into their wallets from outside sources and external wallets. Existing clients were not supposed to fall under this restriction.
Bithumb filed its lawsuit and requested the stay on March 23. Bithumb opposed the severity of the sanctions imposed by the regulator. The court’s ruling will allow Bithumb some time to dispute the allegations without any immediate effect on operations.
The case follows a previous investigation that involved the internal mechanisms of the crypto exchange. The authorities have begun investigating the company after a mistake in one of their promotional offers that awarded users 620,000 Bitcoin.
Crypto Exchanges Expand Legal Battle With FIU
Other exchanges have been putting pressure on FIU initiatives. Recently, Upbit’s parent company, Dunamu, won in court to reverse a three-month suspension. The court cited unclear regulatory guidance in that ruling.
Coinone has also found itself under the same scrutiny as Upbit and Bithumb. It was accused of not verifying over 70,000 users and fined $3.5 million with a three-month suspension. However, its suspension has been temporarily lifted pending its court battle.
These trends illustrate the increasing conflict between the cryptocurrency sector in South Korea and its regulators. The court is playing an increasingly active role in determining the legality of the actions of the regulator. Their choices might influence the way compliance regulations are implemented in the market.
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