South Korea’s third-largest cryptocurrency exchange, Coinone, is facing a fine and a partial business suspension over alleged anti-money laundering (AML) violations, according to multiple local media reports.
The country’s Financial Intelligence Unit (FIU), operating under the Financial Services Commission, accused Coinone of failing to meet AML requirements, including not properly verifying user identities in roughly 70,000 cases, as reported by The Korea Times, Chosun, and Yonhap News on Monday.
Regulators also alleged that Coinone enabled more than 10,000 transactions with 16 overseas exchanges that were not registered with South Korean authorities, despite repeated warnings.
Additional allegations include lapses in customer due diligence, such as marking verification processes as complete despite missing critical information, and failing to restrict transactions for users whose verification had not been finalized.
Regulatory crackdown intensifies
This marks South Korea’s second regulatory action against a crypto exchange in the past month. In March, Bithumb—the country’s second-largest exchange by trading volume—was fined $24 million and subjected to a six-month partial suspension over similar AML concerns.
The increased scrutiny follows an incident in which Bithumb mistakenly transferred 620,000 Bitcoin, valued at approximately $42 billion at the time, instead of 620,000 Korean won. The error prompted the Bank of Korea to urge lawmakers to implement stricter oversight measures for crypto exchanges.
On Monday, the central bank also suggested introducing mechanisms to halt trading during abnormal market activity or sudden price volatility.
Penalties and next steps
The FIU has reportedly imposed a fine of 5.2 billion won (around $3.5 million) on Coinone, along with a three-month partial suspension. During this period, new customers will be barred from depositing or withdrawing funds.
Coinone’s CEO, Cha Myung-hoon, has also received an official reprimand. However, the action is administrative in nature and does not carry criminal charges.
The exchange has 10 days to challenge the decision before the FIU finalizes the penalties.
