The South Korean Police Department announced the ongoing investigation of the Coinone exchange due to its services in margin trading of cryptocurrencies. Margin trading of cryptocurrencies is considered illegal gambling in South Korea. Coinone exchange provided similar services until December last year.
The department of cybercrime investigation unit of South Korea police department believes that margin trading was, in fact, illegal gambling. It could be used for laundering of proceeds derived from criminal activity.
The police refers to the results of their 10-month investigation. The police found that 19,000 people participated in margin trading on the platform. 20 of them became the main defendants of the case because of high trading volumes.
According to police, these traders transferred through the Coinone exchange 3 billion won ($ 2.8 million), from 3,000 to 13,000 transactions through the margin service of the exchange. The police came to this conclusion, having studied the current legislation.
Thus, law enforcers are going to bring to justice three Coinone executives, including its CEO, Myunghun Cha, and 20 traders with the highest volumes of trades.
Representatives of Coinone exchange said that they will help the investigation as much as possible.
Coinone exchange provided a margin trading service from November 2016 to December 2017. The police started the investigation back in August of last year. It was one of the first attempts to more thoroughly study the operation of cryptocurrency exchanges.