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.
In an email response to CoinDesk’s enquiry for comments, a representative from Coinone stated:
“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.”
Editor’s Note: Some of the statements in this report have been translated from Korean.
Korean police image via Shutterstock