Coinone Fined for 70,000 KYC Failures: The U-Turn

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South Korea’s Financial Intelligence Unit has decided Coinone deserves a slap on the wrist, landing a 5.2 billion won fine and a partial shutdown because 70,000 KYC checks went missing in action.

The FIU, part of the Financial Services Commission, didn’t just wink and move along. An on-site audit uncovered the kind of chaos you’d expect if a compliance manual and a bakery recipe crossed paths in a wind tunnel.

The punishment? A hefty fine-about $3.49 million-and a three-month partial business suspension, because apparently crypto platforms benefit from dramatic pauses as much as stilts do in a circus.

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Coinone Fined for KYC Failures and Unregistered Exchange Transactions

The FIU’s findings broke into two obvious red flags. First, Coinone failed to verify customer identities in around 70,000 cases, which is the financial equivalent of trying to pass a masked ball with a mismatched identity badge. South Korean law expects real-name accounts linked to local banks.

Second, Coinone processed nearly 10,000 transactions with 16 overseas exchanges that were not registered. It’s the financial equivalent of bringing uninvited guests from abroad to a party and not telling anyone.

This directly violated the Act on Reporting and Use of Specific Financial Information, known in less glamorous terms as the Special Financial Information Act.

The violations were significant enough to warrant both financial penalties and operational restrictions. Regulators also issued a formal reprimand to Coinone CEO Cha Myung-hoon, and Coinone was given 10 days to submit its position before the fine becomes official.

What the Partial Business Suspension Means for Coinone Users

The suspension runs from April 29 to July 28. During this stretch, new customers cannot deposit or withdraw funds for crypto trading. Existing users can keep trading, because apparently boredom is the only thing bigger than risk in this saga.

The restriction targets external virtual asset transfers for new users, effectively cooling onboarding of fresh capital. It’s a surgical measure, not a decapitation, and certainly not a full blackout.

Yonhap reported that the decision reflects the scale and nature of what the FIU uncovered. Regulators seem determined to tighten gaps in compliance without pulling the plug on the exchange entirely. A measured, not-messy response, if you like your drama with a side of paperwork.

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Coinone Weighs Legal Action Against Financial Authorities

Coinone has acknowledged its shortcomings in the wake of the announcement. The exchange says it will carefully review the possibility of legal action against the financial authorities, which is a very grown-up way of saying, “Do we sue them or not?”

Edaily notes Coinone has not confirmed any final decision on the legal route. That 10-day window to submit an opinion gives the exchange time to consider its options, which is good news if you enjoy suspense and legal paperwork as a sport.

This case adds to the mounting regulatory pressure on crypto exchanges in South Korea. AML enforcement is being tightened with a red pen, and Coinone now joins the club of platforms facing consequences for compliance failures.

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2026-04-13 21:56