South Korean financial regulators have imposed a significant penalty on cryptocurrency exchange Coinone, fining it approximately 5.2 billion won ($3.5 million) and ordering a three-month partial suspension of its business. The sanctions, issued by the Financial Intelligence Unit (FIU) under the Financial Services Commission, are a response to severe failures in the exchange's anti-money laundering (AML) controls.
The suspension period is set from April 29 through July 28, 2026. During this time, Coinone will be blocked from accepting new customers for crypto deposits and withdrawals. However, existing users will be allowed to continue trading normally under certain conditions while the exchange implements corrective measures.
Regulators detailed extensive compliance failures following months of inspections. The FIU found that Coinone failed to properly verify user identities in approximately 70,000 cases. Furthermore, the exchange facilitated roughly 10,000 transactions with 16 unregistered overseas exchanges, a direct violation of reporting requirements. Additional violations included about 40,000 instances of flawed customer due diligence, where identity documents were improperly verified or users were approved with incomplete address information.
Authorities criticized Coinone for treating AML compliance as "a formality" and for maintaining systems that failed to detect and report suspicious activity. The review uncovered gaps in ongoing monitoring, poor documentation, and limited staff training. Notably, the exchange allowed accounts to continue trading even before compliance staff finished reviewing internal alerts, which weakened its response to suspicious transactions. Regulators also stated Coinone missed transactions with clear warning signs, such as repeated transfers to known high-risk wallets and patterns resembling mixing activity.
As part of the sanction, Coinone's chief executive will receive an official reprimand. The exchange has been given 10 days to submit an opinion before the penalty is finalized. In a statement, Coinone said, "We are seriously aware of the FIU's decision to impose sanctions. We are closely examining the shortcomings and taking remedial measures regarding the points pointed out." The business restrictions will remain in place until Coinone confirms and documents that its AML systems have been repaired and are functioning effectively.
This enforcement action against Coinone follows a similar recent case involving another major South Korean exchange, Bithumb, which received a notice for a six-month partial suspension in March for comparable AML violations.
