A South Korean court has delivered a significant legal reprieve for the cryptocurrency exchange Coinone. The Seoul Administrative Court temporarily suspended the Financial Intelligence Unit’s (FIU) partial business ban, which was set to begin on April 29, 2025. The suspension will remain in effect until May 29, providing immediate relief for the exchange and halting a penalty that would have severely restricted its operations.
The court made the ruling on April 25, 2025, ordering a temporary halt to the FIU's enforcement action, which included a fine of 5.2 billion won (approximately $3.9 million) and a three-month partial business suspension targeting new customer onboarding. The court emphasized that this is a preliminary measure, not a final judgment on the underlying dispute, allowing for a full legal review of the FIU’s decision.
The FIU imposed the penalty on April 13, 2025, after finding Coinone in violation of the Act on Reporting and Using Specified Financial Transaction Information. Specifically, the regulator alleged the exchange failed to properly report suspicious transactions and did not implement adequate customer due diligence measures. The penalty would have prohibited new customers from transferring virtual assets, severely impacting Coinone's ability to acquire new users and compete with dominant exchanges like Upbit and Bithumb.
The court’s reasoning for the temporary suspension hinged on several factors: the potential for irreparable harm to Coinone’s business, possible procedural flaws in the FIU's decision, and the public interest in avoiding disruption to the broader crypto market. Legal experts view the decision as a significant check on regulatory power, highlighting that exchanges have legal recourse against aggressive enforcement. The final decision on the legality of the penalty will come later, potentially taking several months.
In a separate development, Coinone has placed Syndicate (SYND) on its delisting watchlist, signaling potential removal of the token from the platform. The decision follows a routine evaluation where the exchange assesses factors like project activity, developer engagement, and market liquidity. SYND's market capitalization has dropped significantly, with trading volumes averaging below $100,000, making it vulnerable to price manipulation. The watchlist acts as a preliminary warning, giving holders a chance to act before a final delisting decision.
Coinone typically provides a 30-day watchlist period, followed by a 15-day grace period, and a 7-day notification before a trading halt. Investors holding SYND on Coinone are advised to check their balances, review withdrawal options, identify alternative platforms, and consider self-custody to avoid potential asset loss.
