South Korean courts have been stepping in to block a wave of regulatory sanctions against the country’s biggest crypto exchanges — and now the industry is taking its fight to the rulemaking process itself.
Industry Body Warns Of Reporting OverloadThe Digital Asset eXchange Alliance, known as DAXA, submitted formal comments opposing proposed changes to South Korea’s anti-money laundering framework.
The group speaks for 27 registered virtual asset service providers, including the five largest exchanges in the country: Upbit, Bithumb, Coinone, Korbit, and Gopax.
DAXA says the math doesn’t work. Reports from South Korea’s five major platforms totaled around 63,000 suspicious transaction cases last year.
Under the new rule, that number would climb to more than 5.4 million annually — an 85-fold increase. The alliance argues the volume would make meaningful compliance nearly impossible.
The Financial Services Commission and the Financial Intelligence Unit jointly put forward the amendments on March 30. A public comment window runs through May 11, with final rules expected in July after regulatory and legal review.
Three Exchanges Win Temporary Court ReliefThe proposed rule changes come as multiple exchanges are already battling sanctions tied to existing AML requirements. Upbit’s parent company, Dunamu, won a first-instance court ruling on April 9 that canceled a three-month partial business suspension.
Bithumb followed a similar path. The Seoul Administrative Court agreed to pause enforcement of a six-month partial suspension while the main case works its way through the system.
Coinone faces both a three-month partial suspension and a fine of 5.2 billion won over AML-related failures. It too received a temporary halt on enforcement after filing a legal challenge.
Exchanges And Regulators On Collision CourseThe pattern is hard to miss. South Korean authorities have been pushing harder on crypto AML enforcement, and the industry has been pushing back — in comment letters, in court, and through its trade group.
Featured image from Nathan Benn/Getty Images, chart from TradingView
