Coinone is one of the most important trading platforms in South Korea and Asia, but part of its staff was involved in a scandal related to some services that the platform offers. Three executives of the company are on trial because they offered margin trading as a ‘gambling product.’ In the future they will have to face more trials regarding that situation.
Coinone Margin Trading Trials
South Korea has an important number of crypto related companies and exchanges, which is fantastic because enterprises need to compete in that market. In order to offer better products, Coinone allowed its users to trade with margin.
With margin trading, users are able to generate great profits. But it is also a very risky way of invest money. Due to the high volatility that the crypto market has, investors may lose their funds in just the blink of an eye.
The South Korean prosecution considers margin trading for cryptocurrencies as a ‘gambling activity.’ Even when it seemed a good idea for Coinone, South Korean authorities left a very worrisome precedent due to the fact that it could be very harmful for users that trade at the exchange.
Moreover, 20 Coinone employees and users have been implicated in this topic. All of the implicated officials and users deny any wrongdoings, considering that they were not doing any illegal activity. At the same time, lawyers at the company were working very hard in order to provide quality advice to the exchange.
In addition to it, Coinone does not collect interest on their margin trading, remaining unclear how they could profit from the ‘gambling’ activities. It will be important for local authorities to conduct a serious investigation on the matter.
An important point to mark is that, with this situation, the market will have clearer rules in the future. If there are other exchanges offering margin trading activities it will be important to see how to implement proper regulations and comply with local authorities. South Korea is one of the most important crypto markets in the world and the government has been imposing different regulations since the last quarter of 2017.
Coinone is one of the most important cryptocurrency trading platforms all over the world. At the moment of writing this article, it is the 44th most active trading platform managing $24 million dollars of volume in the last 24 hours. It has 11 different trading pairs and the most traded are BTC/KRW, EOS/KRW and XRP/KRW.