South Korea’s third-largest cryptocurrency exchange, Coinone, has been fined and hit with a partial business suspension after the Financial Intelligence Unit (FIU) under the Financial Services Commission found alleged anti-money laundering (AML) failures.
According to local reports, the FIU said Coinone did not verify user identities in roughly 70,000 cases and processed more than 10,000 transactions with 16 foreign exchanges that are not registered with South Korean regulators, despite repeated warnings. The FIU also alleged the exchange marked customer verification as complete when key information was missing and failed to block transactions for users whose verification was incomplete.
The FIU has imposed a 5.2 billion won fine (about $3.5 million) and a three-month partial suspension that prevents new customers from depositing or withdrawing funds until the suspension ends. Coinone’s CEO, Cha Myung-hoon, received an official reprimand. The enforcement is administrative rather than criminal, and Coinone has 10 days to appeal before the penalties are finalized.
This action follows a recent regulatory move in March against Bithumb, the country’s second-largest exchange by trading volume, which was fined roughly $24 million and given a six-month partial suspension for alleged AML shortcomings. That incident came after a widely reported erroneous transaction that reportedly transferred 620,000 Bitcoin to customers instead of 620,000 Korean won, an episode that prompted the Bank of Korea to call for stricter controls. The central bank has urged lawmakers to consider measures such as temporary trading curbs to halt trading during unusual activity or sudden price swings.
Cointelegraph reported it reached out to Coinone for comment. As with all developing regulatory matters, readers are encouraged to consult official filings and multiple sources for confirmation.