South Korea’s exchange Coinone is currently facing a lot of trouble. The exchange is facing charges at the moment, and these charges are against the margin trading service of this exchange.
Now, this surely spells trouble for Coineone. The reason is that Coinone is considered to be the third largest digital currency exchange after Bithumb and Upbeat. This is why the reputation of this exchange is surely on the line.
At the moment the charges have been launched against the CEO of Coinone and 20 other members. The authorities are of the opinion that the exchange has been providing gambling services. The gambling services are considered to be illegal in South-Korea.
The authorities claim that the exchange allowed the users to trade three to four times more than initial deposit. The authorities also state that exchange charged commission for these transactions. This is why Coinone is under the fire at the moment.
Margin trading is quite similar to the credit trading in the stock market but the margin trading done by Coinone is more gambling oriented. The authorities did their bit of research and found out that about 19,000 Coinone users make use of the margin trading services offered by Coinone.
The users are in the age group of 20 to 50 years. Three of the members were also able to trade more than 3 million won. The Coinone’s stance on the issue is that they have not been a part of any illegal activity. However, the truth is yet to be revealed.
Coinone states that the trading activities that they offer are already available in the market. If we view the picture from Coinone’s perspective, then a lot is on the line for this exchange. It is very essential that the exchange clarifies its position.
The reason is that the charges will prevent the users from opting for this exchange and this will not turn out to be a favourable situation for Coinone. The picture will be clear once the authorities finish up with their research. Till then the users need to be very careful about their investments.
It is important that Coinone should be willing to come up with a satisfying statement against the charges. It seems that the charges are bound to put off many users, and they may become skeptical when opting for the services of the exchange.
This is also a red flag alert for all those exchanges who are currently offering margin trading service similar to Coinone.