South Korea’s Financial Intelligence Unit (FIU) has fined cryptocurrency exchange Coinone $3.5 million and imposed a three-month partial business suspension for anti-money laundering lapses. The regulator accused the exchange of failing to properly verify user identities in tens of thousands of cases and facilitating transactions with unregistered foreign platforms. This action represents the second major regulatory crackdown on a South Korean exchange in a month, following similar penalties against Bithumb in March.
South Korea’s third-largest cryptocurrency exchange, Coinone, is facing a significant fine and a partial business suspension over anti-money laundering failures. The Financial Intelligence Unit (FIU) accused the exchange of not complying with key obligations, including verifying user identities in approximately 70,000 cases.
The FIU also alleged Coinone facilitated over 10,000 transactions with 16 foreign exchanges not registered with South Korean regulators. Other accusations include violating customer due diligence by marking incomplete verifications as finished and failing to restrict transactions for unverified customers.
This marks South Korea’s second major regulatory action against an exchange in the last month. In March, the country’s second-largest exchange, Bithumb, was fined $24 million and received a six-month partial suspension for similar alleged failures.
The FIU has reportedly fined Coinone 5.2 billion won, which converts to $3.5 million, and imposed a three-month partial business suspension. This suspension prevents new customers from depositing or withdrawing funds from the exchange until the ban is lifted.
The exchange’s chief executive officer, Cha Myung-hoon, is also receiving an official reprimand. This is described as an administrative enforcement measure rather than a criminal penalty.
Coinone has 10 days to dispute the action before the FIU finalizes the fine and other penalties. The moves occur amid increased regulatory scrutiny following a high-profile error by Bithumb that saw $42 billion in Bitcoin erroneously sent to customers.
