The South Korean Police Department announced the ongoing investigation of the Coinone exchange due to its services in margin trading of cryptocurrencies, CoinDesk reports citing Yonhap.
According to the news agency, the investigation department of crimes committed in virtual space suggests that the margin trading of cryptocurrencies on Coinone can be a form of illegal gambling activity and used for money laundering.
The police refers to the results of their 10-month investigation, during which it was found that 19,000 people participated in margin trading on the platform, and 20 of them became the main defendants of the case because of high trading volumes.
According to law enforcers, these traders conducted through the exchange 3billion won ($2.8 million), from 3,000 to 13,000 transactions through the margin service of the exchange, the use of which is classified as participation in illegal gambling activities. The police came to this conclusion, having studied the current legislation.
Thus, law enforcers are going to bring to responsibility three Coinone executives, including its CEO, Muyunghun Cha, and 20 traders with the highest volumes of trades, the publication says.
Coinone provided shoulder-trading services from November 2016 to December 2017, and the investigation, according to Yonhap, was initiated in August 2017.
“Currently, we focus on cooperation with the investigation and will continue to do so when the case is transferred from the police department to the prosecutor’s office,” the representative of the exchange said in response to a request from CoinDesk.