A report from Yonhap News in South Korea says that Police will recommend bringing charges against crypto exchange Coinone over its provision of margin trading.
According to the report, the cybercrime investigation unit of the country’s southern provincial police department has alleged that crypto margin trading from Coinone is, in effect, offering illegal gambling and could potentially be used to launder dirty money from criminal acts.
The police referred to results from a 10-month long investigation, finding that about 19,000 users had participated in margin trading on the platform, of which about 20 traders became primary targets because of their high volume of trades.
The police alleged that these high volume traders had handled a total of over $2.8 million in 3000 to 13000 instances of margin trading using Coinone’s services, which is seen as illegal gambling by the police after reviewing it against existing laws.
The police indicated plans to recommend the prosecution of three Coinone executives, including the CEO, Myunghun Cha, as well as the 20 high volume traders.
Coinone previously offered its margin trading service from November 2016 to December of last year and according to the report, the investigation started in August 2017, making it one of the earliest efforts to deeply scrutinize the business operations of domestic cryptocurrency exchanges.
A representative from Coinone commented on the matter, saying:
“At this time we are focused on cooperating with the ongoing investigation, and will continue to do so as the case is in the process of moving over to the Prosecution Service from the Police Agency.”