As a country, South Korea has been largely progressive in its acceptance of innovations in the cryptocurrency and blockchain sector. The infrastructure of the cryptocurrency exchange market of South Korea is strengthening rapidly, with the support of the government towards small businesses and crypto trading platforms.
Last week, a Seoul Central District Court has reportedly ruled in favor of a local crypto exchange, admonishing a major South Korean bank for cutting ties with the crypto company.
A legal battle has been ongoing between Coinis Exchange and one of the South Korea’s largest commercial banks—Nonghyup Bank. In September, the bank terminated its partnership with Coinis, citing the Anti-Money Laundering (AML) guidelines issued by the Financial Services Commission (FSC) as the grounds for the unilateral termination, according to local media reports.
The termination of the agreement meant that Coinis could not process deposits or withdrawals, ZDNet reported. This prompted the crypto exchange to turn to court for help, seeking to block the termination and restore its relationship with Nonghyup.
The Seoul Central District court agreed with Coinis’ arguments through its lawyer and ruled that the termination was unfair. The court held that termination of deposits and withdrawals for the exchange had not followed due course and no cause had been shown in evidence as to a breach of the guidelines issued by the Financial Services Commission (FSC).
The ruling sets a major precedent in South Korea. It is the first time a local cryptocurrency exchanger has challenged a major bank for unfairly treating a crypto business.
Attorney Kim Tae-lim, representing Coinis, told Digital Daily: “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.”
This isn’t the first time that Nonghyup has called off a banking partnership with a local crypto exchange. Recently, the South Korean bank cancelled its partnership with Bithumb, citing breaches of the guidelines issued to crypto exchangers.
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