South Korea Suspends Coinone for 3 Months, Blocks New Users After 10K+ Illegal Transactions Found
South Korea’s crypto crackdown is getting stronger as regulators take action against Coinone. The country’s third-largest crypto exchange now faces a $3.5 million penalty and service restrictions. Authorities want better safety and transparency in the crypto market.
The Financial Intelligence Unit found several AML violations at Coinone. Reports say the exchange failed to properly verify user identities in about 70,000 cases. This raised serious concerns about illegal activities on the platform.
AML Violations Raise Major Concerns
The probe also found that Coinone worked with foreign exchanges that were not registered in South Korea. More than 10,000 transactions happened with 16 such platforms. Regulators had warned the exchange earlier, but the issue continued.
Officials also pointed out weak customer checks. Coinone marked many accounts as verified even when important details were missing. Some users were allowed to trade without full verification. These gaps clearly showed poor AML systems.
Strict Action and Business Restrictions
The Coinone fine comes with strict action. Regulators have ordered a three-month partial business suspension. New users cannot deposit or withdraw funds during this period. Existing users can still access limited services.
The company’s CEO, Cha Myung hoon, has also received an official warning. This is not a criminal case, but it shows that regulators hold leadership responsible. Coinone now has ten days to respond before the decision becomes final.
Wider Crackdown on Crypto Exchanges
This case is part of the wider South Korea crypto crackdown. Last month, Bithumb’s suspension made headlines after the exchange was fined $24 million. It also faced a six-month partial shutdown due to similar AML violations.
The Bithumb case became more serious after a major mistake. The exchange accidentally sent Bitcoin worth billions instead of a small amount in Korean won. This shocked the market and pushed regulators to act faster.
After this, the Bank of Korea asked lawmakers to bring stricter crypto exchange regulations. New rules may allow trading to stop during sudden price swings or unusual activity. These steps aim to protect investors and reduce risks.
The Coinone fine shows that South Korea is serious about rules. Exchanges must follow proper systems or face strict action. The focus is now on strong compliance and better monitoring.
Experts believe this South Korea crypto crackdown will change the market. Exchanges with strong systems may grow, while weaker ones may struggle. Compliance is becoming the most important factor.
The action against Coinone sends a clear message. Authorities will not ignore AML violations anymore. The crypto industry in South Korea is entering a stricter and more controlled phase.
