The South Korean police department has confirmed that it is planning to prosecute Korean exchange giant Coinone on charges of illegal gambling. This comes after a 10-month investigation done by the Korean cybercrime unit against Coinone.
According to a Yonhap report, a southern provincial police department finds Coinone’s margin trading services similar to illegal gambling as per its existing laws. According to the states law, marginal trading can be used for money laundering of criminal proceeds.
According to the department, the margin services provided buy Coinone did not have permission from the authorities. Coinone is said to have provided up to 4x of the initial deposit, in addition to gaining commissions for a margin trade. Margin trading has also been banned in crypto trading platforms in China.
The 10-month investigation revealed that some 19,000 users had availed Coinone’s marginal trading platform which included traders of ages between the 20s to 50s and were either unemployed or office workers or self-employed.
A 10-month investigation which began in August 2017 determined that some 19,000 users had participated in Coinone’s margin trading platform, an offering which began in late 2016 Traders were predominantly aged between their 20s to 50s and were unemployed, office workers and self-employed.
The report also revealed narrowing down the search on the 20 traders who performed high-volume trading of transactions over 3 billion won ($2.78 million) between 3,000 to 13,000 trades through Coinone.
The police department revealed it took nearly a year to investigate the platform as it was the first investigation of its kind to dig into the operations of a crypto exchange.
Charges against Mangement
Additionally, the Korean police have confirmed on plans to push for charges against three senior Coinone executives including chief executive Myunghun Cha and a co-director along with recommending the 20 high-volume trading to the prosecutor’s office.
Korea’s largest cryptocurrency exchanges, Coinone has repeatedly denied all charges since the beginning of the investigation. One of the who wanted to be unnamed employee told Yonhap:
“We do not consider it illegal because it has been legally reviewed by lawyers before [its launch]. Since we did not receive interest on the part of the lender who saw four times the margins, I cannot see it [as a crime].”