Coinone hit with a massive three‑month ban over major AML breaches in South Korea.
South Korean authorities have issued a preliminary notice that could suspend part of Coinone’s operations for three months due to anti‑money‑laundering breaches. The Financial Intelligence Unit said the exchange lacked proper customer due diligence and failed to report suspicious transactions. A final decision by the Sanctions Review Committee is scheduled for April 13, with penalties possibly reaching 8‑13 billion won. This marks one of the most severe enforcement moves against a Korean crypto platform since 2021. Coinone’s alleged violations contravene the Financial Transactions Report Act and the country’s Travel Rule, which requires detailed transaction data for amounts over 1 million won. Similar actions have hit Bithumb in 2023 with a 1.9 billion‑won fine and Upbit in 2021 with a partial shutdown. The trend reflects South Korea’s tightening AML framework, aligning with global standards set by the FATF. Regulators now favor operational suspensions over simple monetary fines. A three‑month partial suspension would likely halt new user onboarding, fiat deposits and withdrawals, and certain trading pairs. Trading volume could shift to rivals such as Upbit and Bithumb, while investor confidence in regulated exchanges may dip temporarily. The crackdown is expected to spur all virtual‑asset service providers to upgrade monitoring systems and compliance programs. Higher compliance costs could be passed to users through increased fees. The Coinone case underscores South Korea’s move toward strict, real‑time AML enforcement for crypto businesses. Ongoing audits, continuous reporting, and mandatory employee training are now core requirements. Exchanges that demonstrate robust compliance may gain a competitive edge, whereas failures could lead to harsher penalties or license revocation. The April decision will set a benchmark for future regulatory expectations in the region.
