REGULATION | South Korean Exchange, CoinOne, Fined ~3.5 Million and 3-Month Suspension Over AML, KYC Failures

South Korea has fined cryptocurrency exchange Coinone about $3.5 million and ordered a three-month partial suspension of its operations over anti-money laundering (AML) failures, according to local reports.

The country’s Financial Intelligence Unit (FIU) said the exchange violated key AML and know-your-customer (KYC) requirements, including failing to properly verify around 70,000 user accounts and allowing trading activity without completed identity checks.

• Coinone was also found to have violated the customer due diligence obligation under the Act on Reporting and Using Specified Financial Transaction Information in about 40,000 cases.

• The Financial Services Commission uncovered 90,000 violations of the Act on Reporting and Using Specified Financial Transaction Information by Coinone.

• The FIU determined that Coinone violated 30,000 cases of the transaction restriction obligation by not restricting transactions by customers whose customer verification measures had not been completed.

Regulators also found that Coinone processed 10, 113 transactions involving 16 overseas crypto platforms that were not registered with South Korean authorities, despite prior warnings.

As part of the sanctions, Coinone will be barred from onboarding new customers and restricting certain deposit and withdrawal services for three months, starting in late April 2026. Existing users will still be able to trade on the platform.

The FIU also issued an official reprimand to CEO, Cha Myung-hoon. The exchange has been given time to respond and may challenge the decision.

The enforcement action is the latest in a broader regulatory crackdown on crypto exchanges in South Korea, as authorities tighten oversight of AML compliance across the sector.

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