For the first time, a South Korean cryptocurrency exchange has won a case against a local bank that had blocked its accounts. Last month Coinis crypto exchange accounts at Nonghyup Bank were blocked by the bank. It is this latter decision by the Nonghyup bank that led to Coinis lodging a complaint at the 50th Civil Affairs Division Court in Seoul Central District.
According to local media outlets the bank is citing Virtual Currency Anti-Money Laundering (AML) as the main reason that led to the suspension. Furthermore according to Nonghyup bank Coinis was violating the rules put in place by the Financial Service Commission FSC. But come Monday the court decision was in favor of the Exchange. According to the ruling made it’s illegal for Nonghyup bank to suspend Coinis accounts based solely on the rules and regulations from the FSC.
While speaking to local Digital Daily Kim Tae-Lim lawyer associated with the case explained further and said;
“According to the agreement signed between Coinis and Nonghyup bank Coinis has all the rights to deposits and withdraw money from its accounts.”
He concluded by saying;
“The winning in this particular case shows that any indiscriminate regulations against any cryptocurrency exchange platform in Korea should be avoided in the absence of legal grounds.”
Anti-money Laundering Rule in Question
In January this year, the South Korea government introduced a new anti-money laundering law. In the new law, crypto exchanges were required to convert all their accounts to real-name-verified accounts from their cooperate names. However, since its implementation, only four crypto exchanges have complied with the measure. The four exchanges are Korbit, Upbit, Coinone and Bithumb. For Coinone and Bithumb they are getting the real-name conversion services from Nonghyup bank.
For all the other exchanges inclusive of Coinis local banks have refused to offer them the real-name conversion services. For the case of Coinis, the bank’s decision meant they had to continue using their cooperate names.
On the other hand, banks are claiming that any exchange not using real-name-verified accounts, violates the new anti-money laundering law. The banks are so adamant on the new law that Bithumb has to suspend the opening of new virtual accounts in August after a disagreement between them and Nonghyup bank.
With the court ruling in favor of Coinis exchange, the pressure on crypto exchanges to comply with changing their accounts to real-name-verified ones will lessen.