A South Korean district court has ruled that Nonghyup Bank’s decision to stop providing services to the cryptocurrency exchange Coinis should be revoked because it is illegal.
The exchange filed a complaint with the 50th Civil Affairs Division of the Seoul Central District Court seeking to prohibit the bank from suspending its transactions after deposits to its account were blocked by the bank last month. Nonghyup Bank cited the Virtual Currency Anti-Money Laundering (AML) Guidelines set by the country’s Financial Services Commission (FSC) as its reason.
Earlier this week, the court ruled that it is illegal for the bank to suspend the exchange’s transactions based solely on the FSC guidelines and moved to dismiss the suspension. The case is prcedential, as it is the first time that a cryptocurrency exchange has responded to bank suspension measures and has taken legal action.
Kim Tae-lim, a lawyer connected to the case, explained that Nonghyup Bank breached the contract with Coinis since the exchange “has the right to freely deposit and withdraw money in the account in accordance with the deposit agreement entered into between the bank and the exchange.”
“This case is significant in that it is a decision to point out that indiscriminate regulation against a virtual currency exchange should be avoided in the absence of legal grounds,” – he added, as quoted by the Digital Daily outlet.
As reported earlier, the head of the Financial Services Commission (FSC) of South Korea declared that cryptocurrency exchanges compliant with KYC and AML requirements may now take full advantage of the services provided by banks for opening virtual bank accounts. The country’s authorities have earlier endorsed the work of a number of cryptocurrency trading platforms, while promising to lift the ICO ban “in the near future”.
Such crypto trading platforms as Bithumb, Upbit, Gopax, Korbit and Coinone have recently been approved by South Korean regulators for having sufficient security measures and internal management systems in place. South Korean regulators launched a spree of extensive audits of local cryptocurrency exchanges in 2017 in response to the series of cyberattacks.
This news was provided by sanyanblockchain.com, our partnering media source in China.