Coinone hit with $3.5 mln fine, faces suspension as South Korea tightens crypto rules

Coinone has joined the list of crypto exchanges facing hefty fines amid an intense crackdown by South Korean agencies. 

According to a Korea Times report, the country’s fourth-largest centralized crypto exchange was slapped with a $3.5 million (5.2 billion won) fine by the Financial Intelligence Unit (FIU), the anti-money laundering (AML) watchdog. 

The FIU falls under the Financial Services Commission (FSC), the overall agency responsible for the finance sector oversight, including crypto. 

Per the FIU investigation, Coinone failed to comply with the obligation of verifying the identities of 70,000 cases. Additionally, the exchange allegedly supported 10,000 transactions with 16 overseas exchanges that are unregistered. 

South Korea’s AML guidelines demand that crypto exchanges verify names and report transactions above certain amounts. 

Apart from the fine, Coinone will face a 3-month business suspension for the above AML lapses. 

But Coinone’s fine was relatively small compared to other exchanges facing similar regulatory pressures. 

Bithumb and Upbit face pressure amid crackdown

In January 2026, the financial regulator imposed a $24 million fine (35.2 billion won) on the country’s top exchange, Upbit, for flouting AML rules. Its operations were also suspended for three months for AML gaps, such as accepting photocopies instead of the original ID of users. 

Additionally, it allowed over 3 million transactions without proper KYC (Know Your Customer) verification and failed to notify the authorities of suspicious transactions. 

In March, Bithumb faced a similar fate after it accidentally sent $43 billion BTC, nearly 14 times more than the BTC it held in its reserves.

The accident prompted the authorities to evaluate the exchange’s internal control failures, including AML flaws that attracted a $24.5 million fine (36.5 billion won) and a 6-month suspension of operations.  

Following Bithumb’s mishap, the government ordered exchanges to verify user asset balances every five minutes. Additionally, the FSC proposed a controversial 10% revenue fine for exchanges that face security breaches. 

According to Chainalysis, South Korea is the second-largest crypto market after India in the APAC region, thanks to its 2024 Virtual Asset User Protection Act for regulatory clarity. 

Even so, the domestic players must adhere to strict AML rules and secure user assets or face hefty fines and halted operations. 

Final Summary

• South Korea fined Coinone $3.5 million, bringing fines against top crypto exchanges to over $50 million (+70 billion won) in 2026 for AML lapses.
• The compliance gaps have forced authorities to order stricter rules, like verification of user assets every five minutes or a possible 10% revenue fine for security breaches.