TL;DR:
- Coinone received a fine of 5.2 billion won ($3.5 million) for nearly 70,000 failures in user identity verification.
- South Korea’s Financial Intelligence Unit also imposed a three-month partial suspension that will block new crypto deposits and withdrawals.
- Bithumb was sanctioned in March with a six-month partial suspension for similar AML violations.
South Korea’s Financial Intelligence Unit (FIU) sanctioned Coinone with a fine of 5.2 billion won, equivalent to $3.5 million, and ordered a three-month partial suspension of activities, according to reports from local outlets.
The FIU, which operates under the Financial Services Commission, announced the measure on Monday, April 13. The suspension period runs from April 29 through July 28, during which new customers will be unable to deposit or withdraw funds intended for cryptocurrency operations. Existing users will retain their usual access to trading services.
Coinone’s Failures
The detected irregularities cover approximately 70,000 cases of failures in user identity verification, along with some 10,000 transactions conducted with 16 unregistered foreign exchanges. The FIU also identified around 40,000 instances of non-compliance in due diligence procedures, including account approvals with incomplete documentation or inconsistent address information. On top of that, there were nearly 30,000 failures in restricting transactions linked to accounts that did not complete the required verification processes.
The FIU Tightens Its Grip on Korean Exchanges
Coinone’s chief executive will receive a formal reprimand. The company has ten days to submit its defense before the penalty becomes final. “We take the FIU’s decision to impose sanctions seriously,” Coinone said according to Edaily. “We are carefully examining the deficiencies identified and adopting corrective measures.”
The action against Coinone is part of an aggressive pattern of regulatory scrutiny over the industry in South Korea. On March 9, the FIU notified Bithumb, another of the country’s leading exchanges, of a six-month partial suspension over ties to undisclosed foreign virtual asset traders and negligence in customer due diligence. Bithumb’s CEO was also subjected to disciplinary measures in that case. Both actions reflect a tightening of the anti-money laundering regime applied to the sector.
