A South Korean police department announced on Thursday it is sending investigations on crypto exchange Coinone to prosecutors for bringing charges against the platform over its provision of crypto margin trading, report says.
According to Korean news agency Yonhap, the cyber crime investigation unit of the country’s Southern provincial police department alleges Coinone’s margin trading is, in effect, offering an illegal gambling venue that could be used for laundering criminal proceeds.
The police force further referred to results from its 10-month investigation process, which found about 19,000 users had participated in margin trading on the platform, among which some 20 traders had become primary targets due to their high volume of trading.
These traders, as alleged by the law enforcement, in total handled over 3 billion won (or $2.8 million) through 3,000 to 13,000 times of trading using Coinone’s margin service, which is deemed as illegal gambling by the police after reviewing existing law.
As such, the police plans to send three executives from Coinone including its CEO Myunghun Cha to prosecution, as well as the 20 high-volume traders, the report said.
Coinone offered margin trading service from November 2016 to December of last year and according to the report, the police started its investigation in August 2017, which marked one of its first efforts to scrutinize business operations of domestic crypto exchanges.
As of press time, Coinone has not yet responded to enquires made by CoinDesk for comments but the report indicated the firm has denied the accusation since the beginning of the police’s investigation last year, stating:
“We do not think it is illegal because margin trading service has been legally reviewed by lawyers before it was offered.”
Editor’s Note: Some of the statements in this report have been translated from Korean
Korean police image via Shutterstock
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