South Korea Fines Coinone $3.5M, Orders Partial Suspension Over Compliance Lapses

South Korea's Financial Intelligence Unit (FIU) has penalized crypto exchange Coinone for significant compliance failures, levying a 5.2 billion won fine (about $3.5 million) and imposing operational restrictions as authorities tighten oversight of the sector. Reports say the FIU cited broad shortcomings in customer identity verification and the handling of transactions linked to overseas platforms. As part of the enforcement action, Coinone will face a three-month partial suspension affecting new users. During the period, new customers will be unable to deposit or withdraw funds for trading, while existing users will continue to access services normally. Investigators found Coinone failed to properly verify about 70,000 user accounts and identified roughly 40,000 customer due diligence breaches tied to incomplete or inconsistent data. Regulators also flagged around 30,000 instances where trading-related restrictions were not applied to accounts that had not completed required verification, increasing exposure to potential financial-crime risks. The FIU further said Coinone processed nearly 10,000 transactions involving 16 unregistered overseas exchanges, violating local rules governing cross-border crypto dealings. Coinone said it is reviewing the findings and implementing corrective measures. The exchange's chief executive is set to receive an official reprimand. Regulators have given Coinone 10 days to submit its response before the penalty is finalized. The move follows a similar enforcement case against Bithumb, signaling a consistent, tougher regulatory stance toward major crypto platforms in South Korea as authorities raise expectations on verification controls and cross-border transaction oversight.