Coinone Hit With $3.5 Million Fine Over AML Compliance Failures

Regulatory Crackdown Hits Coinone

South Korea's Financial Intelligence Unit (FIU) has penalized local exchange Coinone with a $3.5 million fine and a temporary partial business suspension. The regulatory action follows an investigation that uncovered widespread anti-money laundering (AML) failures, including the processing of transactions for tens of thousands of unverified accounts.

Regulators identified 70,000 accounts that lacked proper identity verification. This discovery highlights the ongoing pressure on exchanges to maintain strict compliance standards as the government tightens its oversight of the crypto market analysis. The exchange must now rectify these internal control deficiencies to restore full operational capacity.

The Scope of Compliance Failures

Investigations revealed that Coinone failed to enforce mandatory know-your-customer (KYC) protocols, allowing a significant number of users to trade without verified identities. Furthermore, the exchange facilitated transactions involving 16 unregistered foreign cryptocurrency entities. This practice directly contravenes South Korean guidelines aimed at preventing illicit financial flows and money laundering.

Key Findings from the FIU Audit

• Total Fine: $3.5 million penalty imposed for internal control failures.
• Account Violations: 70,000 unverified user accounts identified.
• Operational Restriction: A 3-month partial suspension of business activities.
• External Exposure: Direct transaction links to 16 offshore, unregistered exchanges.