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Executives of Korean Exchange Sentenced to Jail for Faking Volumes

January 20, 2019 |

Executives of Korean Exchange Sentenced to Jail for Faking Volumes

Two executives of a South Korean cryptocurrency exchange have reportedly been sentenced to jail for inflating trading volumes on their exchange. The pair allegedly used a bot to fake large orders in both cryptocurrencies and Korean won.

Also read: Indian Supreme Court Moves Crypto Hearing, Community Calls for Positive Regulations

Prison Sentences

Two executives of South Korean cryptocurrency exchange Komid were sentenced to jail on Thursday “for their roles in orchestrating fraudulent trading volume reports on their platform,” The News Asia reported.

Executives of Korean Exchange Sentenced to Jail for Faking Volumes

One of the executives is the CEO of the exchange, Choi Hyunsuk. He received a three-year prison sentence while the other executive received a two-year jail sentence, Maekyung publication detailed, asserting:

This is the first time a representative of a virtual currency exchange has been sentenced to prison for allegedly inflating trading volumes.

Executives of Korean Exchange Sentenced to Jail for Faking VolumesKomid began operations on Jan. 5 last year after beta test runs. According to the court, Choi created more than five fake accounts in January last year and inflated trading volumes in both cryptocurrencies and Korean won on his exchange. The two were sentenced to prison “for fraud, embezzlement, and misconduct,” The News Asia noted, elaborating:

The charges from prosecutors outlined a scheme wherein the two defendants fabricated 5 million transactions on their platform to deceive investors into thinking that the volume was natural. This led to the two earning about $ 45mil. There is also a suspicion that they utilized a ‘bot’ to automatically create large orders, which attracted new users.

Damaged Confidence

The judge explained that “Choi has committed fraud for a countless number of victims for a long period of time,” the news outlet conveyed. “There is a need for punishment because the damage caused by the creation of false electronic records is large,” Maekyung quoted him as saying.

However, Edaily reported that the judge took into account the fact that the damage was minimized as some funds were returned. In addition, he found that “The defendants did not appear to have committed a crime with strong fraudulent intentions.” Nonetheless, he concluded:

The crime has damaged customers’ confidence in the virtual currency exchange and has had a negative effect on the domestic virtual currency trading market.

Executives of Korean Exchange Sentenced to Jail for Faking Volumes

Cryptocurrency exchanges have been caught using trading bots to falsify orders since the early days of Mtgox. In December last year, officials of one of the country’s largest crypto exchanges, Upbit, were indicted for fraud. They allegedly faked orders worth approximately $ 226 billion and sold 11,500 BTC to about 26,000 investors. Upbit has denied the allegations.

Other domestic crypto exchanges in a similar bind include Coinnest, whose executives were indicted in September last year for accepting a bribe. Moreover, employees of crypto exchange HTS Coin were arrested in September last year on suspicion of fraud and embezzlement.

What do you think of Komid’s executives being sentenced to prison for faking volumes? Let us know in the comments section below.


Images courtesy of Shutterstock and Komid.


Need to calculate your bitcoin holdings? Check our tools section.

The post Executives of Korean Exchange Sentenced to Jail for Faking Volumes appeared first on Bitcoin News.

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Coinnest Executives Indicted for Accepting Bribe for Coin Listing

September 25, 2018 |

Coinnest Executives Indicted for Accepting Bribe for Coin Listing

The Seoul Southern District Public Prosecutors’ Office has reportedly indicted two executives of South Korean crypto exchange Coinnest for accepting a bribe in exchange for listing a cryptocurrency. According to local media, they received 1 billion won (~US$ 890,000) worth of cryptocurrencies – mostly BTC.

Also read: 160 Crypto Exchanges Seek to Enter Japanese Market, Regulator Reveals

Coinnest Execs Indicted for Accepting Bribe

The financial investigation department of the Seoul Southern District Public Prosecutors’ Office said last week that it has indicted the CEO and COO of crypto exchange Coinnest “on charges of receiving a bribe,” Korea IT Times reported.

Coinnest Executives Indicted for Accepting Bribe for Coin ListingCEO Kim Ik-hwan and COO Cho have been accused of accepting a bribe from the CEO of a company seeking to list its cryptocurrency on Coinnest. Local media refer to this coin only as “S coin.”

In addition to indicting Coinnest’s executives, “The prosecution also indicted another Kim, the CEO of S Coin, on charges of giving bribery, asking the two Coinnest executives to help with the virtual currency listing process,” the publication elaborated, adding:

Coinnest CEO Kim and [COO] Cho received 1 billion won [~US$ 890,000] worth of bitcoin and S coin in early February this year in return for offering their convenience in listing the S coin.

Coinnest Executives Indicted for Accepting Bribe for Coin ListingSpecifically, the duo “received a total of 110 bitcoins worth 860 million won [~$ 771,270]” on Feb. 5 and 6, the news outlet detailed, adding that they also received “2 million S coins worth 70 million won [~$ 62,778] each” on Feb. 12 and 14.

The prosecution believes that the executives provided the issuer of S coin with the “unfair” convenience of listing the coin, such as listing “without precise examination of the technology of S coin and hastening the listing date of S coin,” Yonhap detailed.

Previous Charges

Coinnest Executives Indicted for Accepting Bribe for Coin ListingThe two executives of Coinnest were also indicted on April 23 on a different charge. Korea IT Times explained that they were charged with “violating the law on specific economic crimes, including fraud, along with the company executive Hong. At that time, Kim and his party were suspected of having embezzled money by selling fake coins as if they existed.”

In April, all major crypto exchanges in South Korea jointly declared self-regulation under the guidance of the Korean Blockchain Industry Association. However, Coinnest opted out. When the association announced that 12 out of its 23 exchange members had completed self-inspection in July, Coinnest was not among them.

Coinnest, however, was one of the crypto exchanges that recently completed implementing short-term security measures, the Korea Internet and Security Agency (KISA) and the Korean Ministry of Science and Technology announced in August.

What do you think of Coinnest’s executives accepting a bribe for coin listing? Let us know in the comments section below.


Images courtesy of Shutterstock and Coinnest.


Need to calculate your bitcoin holdings? Check our tools section.

The post Coinnest Executives Indicted for Accepting Bribe for Coin Listing appeared first on Bitcoin News.

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