The Seoul District Court has today accused Nonghyup, a major bank, of breach of contract against a crypto exchange after the bank abruptly prohibited the exchange from getting deposit and withdrawal services.
Nonghyup, a leading commercial bank in South Korea, terminated, without consultation, the banking privileges enjoyed by Coinis, a cryptocurrency exchange in the country.
The decision by the bank made Coinis unable to handle withdrawals and deposits. The exchange went to the Seoul District Court to protest the decision and hopefully regain its partnership with the bank. The court ruled in favor of the exchange citing the suspension imposed by the bank as ‘not fair.’
According to Attorney Kim Tae-rim who represented Coinis in the court:
“Cryptocurrency exchanges, by default, have the right to freely deposit and withdraw funds to and from major banks in South Korea, and an abrupt termination of partnership and services by the bank [Nonghyup] without sufficient evidence or reasoning falls under the breach of contract.”
Coinis becomes the first crypto-affiliated firm in South Korea to contest and win a case against a leading commercial bank like Nonghyup.
For Kim, the court has made it clear that the leading banking institutions in the country cannot end banking partnerships with virtual currency firms “without legal basis or sufficient evidence to prove a breach of contract.”
Nonghyup has also been in banking battles with one of the leading crypto exchanges in the country, Bithumb. The battles have so far been quenched and a banking partnership between Bithumb and Nonghyup signed allowing the exchange to process deposits and withdrawals.
The court’s ruling also indicates that traditional banking institution in South Korea cannot just “terminate services to businesses based on the guideline established by the Financial Services Commission,” said Tae-rim.
In the recent past, the cryptocurrency space in South Korea has been improving due to the concerted efforts of all the involved parties.
Do you think the breach of contract against a crypto exchange helped caution banks against unilaterally undermining services offered to cryptocurrency exchanges?
Let us know your thoughts in the comments section below.
