Court rules in favor of local crypto exchange over bank
A court has sided with local cryptocurrency exchange Coinis, according to multiple industry sources, ruling that a bank’s termination of the its contract with the exchange was not legally valid. The Seoul Central Court ruling said the bank’s claim that the termination followed the government’s guidelines is groundless, referring to regulators’ directives to the banking industry to only do business with “real name” entities. Industry sources added that the government’s guideline can’t be used as a reason for nullifying a contract, since compliance with the guideline is not legal requirement. The court battle began in September 2018 when Coinis requested an injunction against the bank’s decision to suspend deposit service, given that the exchange didn’t use a real name identification system, in contradiction of the Financial Services Commission’s guideline issued two months earlier. According to the guideline, banks are allowed to terminate a service contract if a crypto currency is not found to use real name system. At the time, only four exchanges — Bithumb, Upbit, Coinone and Korbit — adopted the real name system. The other exchanges tapped into corporate accounts holding multiple individuals. The court ruled in favor of the exchange, saying that the guideline is an administrative order, and not legally binding. The termination measure also incurred irreversible losses, Wavestring argued. The bank appealed, but the court rejected its appeal. “It is interpreted as a warning against financial administrative orders,” Kim Tae-rim, a lawyer at law firm Vision, said.