Regulator fines cryptocurrency exchanges over trade irregularities

Financial authorities announced that Korea’s five cryptocurrency exchanges have neglected their duty to monitor irregular crypto trading practices. These exchanges were fined and given disciplinary warnings and have been instructed to implement improvements within the next three months.

The Financial Intelligence Unit (FIU) said on Thursday that it has imposed regulations on five cryptocurrency exchanges, namely Bithumb Korea, Coinone, Dunamu, Korbit, and Streami. The FIU took the action after discovering that these exchanges had failed to fulfill their obligations regarding the reporting of irregular crypto trading.

Under the current law, cryptocurrency exchanges are required to report irregular crypto trading to prevent illegal activities like money laundering.

The instances of irregular trading discovered this time include the use of borrowed-name bank accounts for transactions and insufficient internal controls.

For example, the agency discovered that a 95-year-old man was trading over 30 different types of cryptocurrency, primarily late at night. To avoid suspicion of money laundering, the man divided his money into amounts below 990,000 won ($761.01) and exchanged them in multiple smaller transactions.

Another case involved a customer who repeatedly withdrew money immediately after a large amount of virtual assets had been deposited into the account.

Furthermore, one of the board members of a cryptocurrency exchange was found to have conducted transactions using their spouse’s name.