Coinone is expected to receive charges from South Korea’s police authorities for providing illegal margin trading, stated a report.
According to Yonhap, the cybercrime investigation institute based in South Korea has identified that Coinone’s trading services actually provide illegal gambling which could lead to money laundering.
Margin trading is a service through which participants can lose or earn money according to bets they’ve made regarding the evolution of virtual currency prices. This service is based on the same techniques of credit trading offered by the stock market, but it has operated on a gambling basis because it wasn’t authorized.
The police department has linked the results of the 10 months-investigation with the incident. According to it, 19,000 marginal transactions users used the Coinone’s platform, of which 20 clients have become the target of cybercriminal investigation because of the high volume of traded cryptocurrencies. According to police suspicions, the 20 users would have traded $ 2.8 million, making around 13,000 transactions in illegal gambling.
One of them has stated this: “I did not know it was illegal because there was a similar service in stock investment.”
The authorities mentioned that will accuse three of the Coinone’s board directors, in front with CEO Myung-hoon Chae as well the 20 high-volume users and will direct them to the Prosecutor’s Office in order to receive further allegations.
Coinone has provided marginal trading features between November 2016 and December 2017. According to the report, authorities began the investigations only in August 2017.
Indignant by these measures, a co-worker claimed that “We do not think it is illegal because we have been legally reviewed by the lawyers before the margin trading service. four times the margin, I can not see it.”
Asked by CoinDesk, a spokesperson of 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.”