South Korea’s financial regulators fined the cryptocurrency exchange Coinone 5.2 billion won (approximately $3.8 million) and temporarily suspended some of its operations for three months. The penalties were issued after an inspection revealed significant weaknesses in how Coinone verifies customer identities and manages transactions with foreign exchanges that aren’t officially registered.
Key Takeaways:
- South Korea’s FIU fined Coinone 5.2 billion won and imposed a 3-month partial business suspension starting April 29, 2026.
- Coinone failed to verify roughly 70,000 customer identities and processed 10,113 trades through 16 unregistered overseas exchanges.
- CEO Cha Myung-hoon received an official reprimand; Coinone has 10 days to respond and may appeal via administrative lawsuit.
Coinone Hit With 5.2 Billion Won Fine and Partial Business Suspension
The Financial Services Commission’s FIU confirmed the sanctions on April 13, 2026, following an on-site inspection of Coinone conducted as part of the agency’s broader review of the country’s top virtual asset service providers. Several regional publications reported on the matter.
Coinone, often ranked South Korea‘s third-largest crypto exchange by trading volume, reportedly failed to properly verify customer identities in approximately 70,000 cases. Inspectors found roughly 40,000 instances involving unverifiable or incomplete ID documents and around 30,000 cases where users were allowed to trade without completing verification.
The exchange allegedly facilitated around 10,113 transactions tied to 16 unregistered overseas virtual asset platforms, a direct violation of the Act on Reporting and Using Specified Financial Transaction Information, commonly known as the Special Financial Information Act.
The bank also committed other violations, such as insufficient oversight of financial transactions, a lack of reporting on some international currency exchanges, and not stopping prohibited transactions when asked by regulators.
Coinone CEO Cha Myung-hoon received a formal warning as part of regulatory action taken against the exchange. Coinone has ten days to respond with further information regarding the penalty before it becomes final.
The partial suspension runs from April 29 to July 28, 2026. During that window, new customers cannot deposit, withdraw, or conduct external virtual asset transfers for crypto trading purposes. Existing account holders retain full access to trading, deposits, withdrawals, and Korean won transactions.
The Financial Intelligence Unit clarified that this suspension isn’t complete, as the platform remains operational and existing users aren’t affected. Coinone was initially informed about the potential penalties on March 27, 2026, and a review committee later confirmed these measures on April 13.
Coinone says it’s treating this issue with urgency and is actively addressing the areas where it fell short of regulations. The company is also considering legal action and will discuss the possibility with its board of directors before making a decision.
South Korea’s FIU has been rolling out enforcement actions in the order inspections were completed across the country’s major exchanges. Upbit, operated by Dunamu, received a similar three-month partial suspension and fine, and has filed an administrative lawsuit. Bithumb faced steeper penalties, including a reported fine of 36.8 billion won and a six-month partial suspension.
Coinone faced penalties based on how serious the issues were that inspectors found. Financial authorities have repeatedly explained that these actions are essential for making sure virtual asset businesses verify users’ identities and prevent money laundering.
Coinone is pausing new user registrations and restricting transfers to external wallets for three months, which will likely decrease its immediate earnings. The company intends to use this time to improve its regulatory compliance.
The actions signal that South Korea is continuing to press virtual asset platforms on AML and KYC standards, and other exchanges still awaiting final sanctions may face added pressure to strengthen their compliance programs before the FIU completes its review cycle.
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2026-04-13 18:57