The South Korean police are reportedly preparing to charge Coinone’s executives, including its CEO, and 20 of the exchange’s members. This follows a 10-month investigation on allegations that the exchange provided gambling services through its crypto margin trading program.
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Coinone’s Investigation Concludes
South Korea’s Cybercrime Investigation Unit of the Southern Provincial Police Department announced on Thursday, June 7, its plan to bring charges against Coinone over the exchange’s margin trading service, local media report.
Coinone, which opened in August 2014, is the country’s third-largest cryptocurrency exchange, after Upbit and Bithumb. Its 24-hour trading volume is $34,342,088 at the time of this writing, according to Coinmarketcap.
The police are reportedly recommending that the prosecutor’s office charges three of Coinone’s executives, including CEO Myunghun Cha, as well as 20 members. The former will be charged with providing illegal gambling services and the latter with illegally gambling.
In South Korea, gambling is a crime under Chapter 23 of the Criminal Act.
The investigation of Coinone “on allegations that the exchange provided gambling services for margin trading” began in August last year, the Kyunghyang Shinmun wrote, elaborating:
The police concluded that the ‘margin trading’ service of the virtual currency exchange is gambling.
According to the police, “The case was the first investigation related to the operation of a virtual currency exchange and it took considerable time to review the law,” Yonhap conveyed on Thursday.
Crypto Margin Trading vs Gambling
Coinone and its executives have been accused of providing cryptocurrency gambling services through its margin trading program from November 2016 to December last year. The exchange “allowed members to trade up to four times the amount of the
