A South Korean Court just ruled a Bank’s decision to stop servicing a cryptocurrency exchange should be rescinded because it is unlawful. This decision was made by the Central District Court’s 50th Civil Affairs Division. The bank in question is known as Nonghyup. It decided to stop offering withdrawals and deposits for Coinis, a cryptocurrency exchange. The bank said that it made this decision based on its anti-money laundering guidelines that were issued by the FSC.
According to the lawyer of the plaintiff, the banks move to stop providing these services was a breach of contract. This is because both party initially signed an agreement which the bank disregarded unfairly.
Nonghyup Proceeds With Caution
In the past, Nonghyup has been a target to regulators in South Korea. This is because of its relationship with a cryptocurrency exchange. In the beginning of 2018, all commercial banks that offered banking services to cryptocurrency exchanges came under regulatory scrutiny. Regulators in Asia have been trying to crack down fraudulent activities related to cryptocurrencies.
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About three months after the dust settled, Nonghyup was set to undergo on-site inspections because of the services they offer to cryptocurrency exchanges. The regulators wanted to make sure that the bank was adhering to the Anti-Money laundering and Know-Your-Client regulations that governed the region.
The fallout between Coinis and Nonghyup isn’t the first of its kind. The bank seems to have a thing against cryptocurrency trading platforms. About three months ago, the bank refused to renew Bithumb’s contract. This move came about two months after Bithumb was hacked losing over $30 million in tokens. At the time, the bank claimed that it did not renew the contract because of laxity on Bithumb’s part. A bank official said:
“We have chosen not to renew the contract because Bithumb is still having issues with protecting information and customers from fraud”.
All these happenings make people think Nonghyup has a thing against the cryptocurrency industry. It’s either that or the bank is just being extra cautious about the unregulated space.