Coinone's KYC Catastrophe: $3.5M Lighter and Grounded for 3 Months as Korea's AML Crackdown Rolls On

Coinone just got added to South Korea's growing list of exchanges learning expensive lessons about AML compliance. Apparently, "move fast and break things" doesn't fly when regulators are watching.

The Financial Intelligence Unit hit the fourth-largest Korean exchange with a $3.5 million fine and a three-month business suspension. The reason? Coinone failed to verify identities for 70,000 cases and facilitated 10,000 transactions with 16 unregistered overseas exchanges. Because apparently, "trust us bro" counts as KYC in some parallel universe.

South Korea's AML rules require exchanges to verify names and report transactions above certain thresholds. Revolutionary concept, really—asking people who they are before letting them move money around.

But Coinone's fine is practically pocket change compared to what others have faced. Upbit caught a $24 million fine plus a three-month suspension back in January 2026 for accepting photocopies instead of original IDs, processing over 3 million transactions without proper KYC, and failing to report suspicious activity. Someone really thought a blurry selfie of an ID counted as due diligence.

Bithumb's oopsie was even pricier. The exchange accidentally sent $43 billion in Bitcoin—roughly 14 times what it actually held in reserves. That little mishap prompted regulators to dig into internal controls, landing Bithumb a $24.5