Dismissal of Preliminary Disposition Claims Seeking Prohibition on Commercial Bank’s Suspension of Virtual Asset Operators’ Account Transactions
2021.07.19.
Yulchon represented commercial banks in defending against preliminary disposition claims made by virtual asset exchanges seeking prohibition on the banks’ suspension of transactions on the business accounts (without real-name verification function) used by virtual asset exchanges to receive investor money, and the petition was dismissed by the court.
There have been other similar cases, but this was the first case occurring after the amendment to the Act on Reporting and Using Specified Financial Transaction Information (the “Specified Financial Information Act”), which requires virtual asset operators to use accounts with real-name verification function and receive ISMS (Information Security Management System) authentication and register with the Korea Financial Intelligence Unit (KFIU), and thus involved more issues such as the scope of obligations under this amendment and when it goes into application. Additionally at issue was how to treat the expedient use of an escrow account in the name of a law firm by one of the virtual asset exchanges to circumvent regulations under the Specific Financial Information Act.
Based on experience of handling many similar cases, Yulchon successfully defended the clients based on in-depth interpretation of the amendment and accurate analysis of the characteristics and realities of the virtual asset market. As a result, the court decided in favor of our clients, dismissing all claims raised by the virtual asset operators. This case is meaningful in that it sets an important leading case of how the amendment to the Specified Financial Information Act should be interpreted.
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