South Korea’s Financial Intelligence Unit (FIU) has hit cryptocurrency exchange Coinone with a 5.2 billion won ($3.5 million) fine and a three-month partial business suspension. The regulator cited significant failures in customer identity verification and illicit transactions with unregistered overseas entities.
The suspension period is scheduled to run from April 29 through July 28. During this time, Coinone is prohibited from allowing new customers to deposit or withdraw funds for crypto trading. Existing users will retain access to their accounts, according to reports from local outlets including Yonhap News Agency and Edaily.
Regulatory findings and enforcement
The FIU investigation uncovered approximately 70,000 instances where the exchange failed to properly verify user identities. Investigators also flagged roughly 10,000 transactions linked to 16 unregistered overseas exchanges, violating local anti-money laundering (AML) protocols.
Further evidence presented by the regulator highlighted nearly 40,000 customer due diligence violations. These included approving users with incomplete or inconsistent address data and failing to verify identity documents adequately. An additional 30,000 cases involved transaction restriction failures for accounts that had not completed mandatory verification procedures.
As part of the disciplinary action, Coinone’s chief executive will face an official reprimand. The exchange has been granted a 10-day window to submit a formal response before the penalties are finalized.
In a statement reported by Edaily, the exchange acknowledged the gravity of the situation. "We are seriously aware of the FIU's decision to impose sanctions," the company stated. "We are closely examining the shortcomings and taking remedial measures regarding the points pointed out."
This enforcement action mirrors recent regulatory pressure on other major South Korean platforms. In March, the FIU issued a notice of a six-month partial suspension to Bithumb, citing similar issues regarding unreported overseas virtual asset operators and negligence in customer due diligence. Both cases underscore the South Korean government's aggressive stance on enforcing strict AML compliance within the domestic digital asset market.
