BY Fintan Ng - November 5, 2018
South Korean crypto exchange wins lawsuit to continue bank services
More positive news for the crypto space is coming out of South Korea, where a Seoul civil district court has ruled a bank’s move to deny services to a cryptocurrency exchange as illegal and unfair.
According to a report from tech news website ZDNet, the court ruled that Nonghyup Bank’s decision to stop offering services to Coinis exchange went against banking regulations.
The decision, reached last week, could have broader repercussions for the blockchain industry, especially since the government is set to make its stance on initial coin offerings (ICOs) known as soon as this month.
Nonghyup had in September filed a motion to suspend services to Coinis based on the country’s anti-money laundering guidelines.
This was challenged by the exchange, which considered the suspension of services as a breach of contract.
A lawyer connected to the case says the court’s decision “is significant” as “indiscriminate legislation” against an exchange should be avoided in the absence of legal grounds.
Nonghyup had also ended a business relationship with Bithumb in August, two months after the exchange was hacked and lost US$31.5mil.
The bank has come under scrutiny from the country’s financial watchdog, the Financial Services Commission (FSC), this year for offering services to exchanges with regulatory officials imposing onsite inspections.
Last week, FSC chairman Choi Jong-Ku affirmed that exchanges should face no obstacles in accessing bank services as long as they have safeguards in place.
South Korean legislators have in recent months been pushing for laws giving a clearer framework for cryptos and ICOs.