South Korea’s 3rd-Largest Crypto Exchange Penalized For AML Breaches

Coinone’s chief executive is facing an official reprimand after South Korean regulators moved against the crypto exchange for a string of compliance failures, including tens of thousands of unverified user accounts and repeated dealings with unlicensed foreign platforms.

Regulator Cites Tens Of Thousands Of Violations

South Korea’s Financial Intelligence Unit, operating under the Financial Services Commission, found that Coinone failed to verify the identities of users in roughly 70,000 cases.

The exchange was also accused of completing customer verification records even when key information was missing — and of allowing transactions to continue for customers whose identity checks had never been finished.

According to multiple South Korean media reports, the FIU flagged more than 10,000 transactions carried out with 16 foreign exchanges that had no registration with South Korean regulators. Regulators had warned Coinone about those dealings before. The exchange kept going anyway.

South Korea’s FIU fined Coinone $4M and hit the exchange with a three-month partial suspension over AML violations.

New customers are blocked from crypto deposits and withdrawals starting April 29.

— Token Metrics (@tokenmetricsinc) April 13, 2026

The FIU fined Coinone 5.2 billion won, equal to about $3.5 million. A three-month partial business suspension was also imposed, blocking new customers from depositing or withdrawing funds for the duration of the ban.

Chief executive officer Cha Myung-hoon received a formal reprimand, though reports note it carries no criminal weight — the action is administrative in nature. Coinone has 10 days to challenge the penalties before they are finalized.

Second Major Exchange Hit In A Month

This is not the first time South Korean authorities have gone after a major exchange in recent weeks. In March, Bithumb — the country’s second-largest crypto platform by trading volume — was fined $24 million and handed a six-month partial suspension over similar anti-money laundering failures.

That action came after Bithumb made headlines for a costly clerical error: the exchange accidentally sent customers 620,000 Bitcoin, valued at roughly $42 billion at the time, instead of 620,000 Korean won.

The blunder prompted the Bank of Korea to call on lawmakers to impose tighter controls on exchanges, including trading curbs that could kick in during unusual market activity or sharp price swings.

The exchange, ranked third in South Korea by size, now joins Bithumb as targets of what appears to be a widening regulatory push against crypto platforms in the country.

Officials said Monday that lawmakers should consider trading halt mechanisms tied to abnormal activity — a proposal that signals authorities are looking at structural fixes, not just fines.

How Coinone responds to the FIU’s action within its 10-day window will likely shape how the final penalties are written.

Featured image from Unsplash, chart from TradingView