Fun

Korean Police Seize Crypto Exchange Coinbit Over Allegations of $84 Million in Wash Trades

News Feed - 2020-08-27 01:08:00

Korean Police Seize Crypto Exchange Coinbit Over Allegations of $84 Million in Wash Trades


Police in South Korea on Wednesday raided and seized the offices of Coinbit, the country’s third largest crypto exchange, over allegations it faked 99% of its trading volume.


According to a report from Seoul News, local police took control of Coinbit’s headquarters in Gangnam as well as other sites elsewhere.


Police accuse the exchange’s owner Choi Mo and other managers of “wash trading”. For about a year until May 2020, the process earned Coinbit 100 billion won ($84 million) in profit fraudulently, it said.


A wash trade is a form of market manipulation in which an investor simultaneously sells and buys the same financial asset to create misleading, artificial activity in the marketplace. It is illegal in most jurisdictions.


In the case of Coinbit, the exchange was functionally split into two operational accounts containing all user funds, say police. Fraud within the first account involved major cryptocurrencies bitcoin (BTC), ethereum (ETH), ripple (XRP), and tether (USDT), which Coinbit staff moved internally between “ghost accounts”.


The other account exclusively traded dubious altcoins and initial exchange offerings. The firm prevented transactions with outside exchanges so that the owner and management were able to control the supply of coins. Choi and his team manipulated this structure by trading large quantities of the listed crypto and then dumping them on unsuspecting retail traders.


According to the newspaper report, authorities are also questioning the possibility of additional malpractice and embezzlement. The paper said it examined Coinbit’s books before alerting the police. It held off its report at the police’s request, but its investigations found discrepancies in the deposits and withdrawals of 99% of the trading volumes.


An accounting firm refused to work with Coinbit after reviewing its accounts, the paper said. In April, South Korea’s Financial Supervisory Service also refused to sign-off the exchange’s financial statements, which had not been externally audited.


Coinbit had 252,000 visitors in the last three months and is only surpassed by Bithumb and Upbit in South Korea. Police investigations are ongoing. As South Korea drafts crypto laws, there is concern that more such seizures could follow.


What do you think about the Coinbit seizure? Let us know in the comments section below?Bitmex Restricts Ontario Residents as Mandated by Canadian RegulatorEXCHANGES | 3 days agoBitfinex Offers $400 Million in Rewards to Get Back 120,000 Stolen BitcoinsEXCHANGES | Aug 5, 2020Tags in this storyBithumb, Choi Mo, coinbit, Fake trades, initial exchange offering, market manipulation, Retail traders, South Korea, South Korea Financial Supervisory Service, upbit, wash trading


Image Credits: Shutterstock, Pixabay, Wiki CommonsSpot-markets for Bitcoin, Bitcoin Cash, Ripple, Litecoin and more. Start your trading here.Disclaimer: This article is for informational purposes only. It is not a direct offer or solicitation of an offer to buy or sell, or a recommendation or endorsement of any products, services, or companies. Bitcoin.com does not provide investment, tax, legal, or accounting advice. Neither the company nor the author is responsible, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with the use of or reliance on any content, goods or services mentioned in this article.Read disclaimerShow comments

News Feed

Ezra Reguerra10 hours agoIndonesia to conduct blockchain trials for public servicesTuhu Nugraha, who works with the Indonesian government, said the country will soon conduct trials on applying blockchain technology in pu
Turkey Investigates Former FTX CEO Sam Bankman-Fried for Fraud, Seizes Assets
Turkey Investigates Former FTX CEO Sam Bankman-Fried for Fraud, Seizes Assets The Turkish government has launched an investigation on the former chief executive of failed cryptocur
Finiko Fugitives Suspected of Moving 750 BTC From Crypto Pyramid’s Wallet
Finiko Fugitives Suspected of Moving 750 BTC From Crypto Pyramid’s Wallet A large amount of cryptocurrency has reportedly been withdrawn from a wallet previously controlled by th
Bitcoin Price Moves From 56 To 60-Day Cycle After Crash Below $100,000, What To Expect Next
Este artículo también está disponible en español. The Bitcoin price’s market dynamics have taken an interesting turn as the cryptocurrency adjusts its cycle pattern
Wormhole Releases Solana and Ethereum NFT Bridge — A Bi-Directional Highway for Blockchain Collectibles
Wormhole Releases Solana and Ethereum NFT Bridge — A Bi-Directional Highway for Blockchain Collectibles Last Friday, blockchain project the Wormhole Network launched the protocol
SEC to Boost Access to Crypto Investments With Proposed New Accredited Investor Definition
SEC to Boost Access to Crypto Investments With Proposed New Accredited Investor Definition The U.S. Securities and Exchange Commission (SEC) has proposed amending the definition
Ukraine’s Cyberpolice Force Starts Accepting Cryptocurrency Donations
Ukraine"s Cyberpolice Force Starts Accepting Cryptocurrency Donations As Ukraine is increasingly relying on crypto donations, its Cyberpolice force has also decided to seek help fr
Coinbase Sees Rising Altcoin Interest As Traders Prepare For Big Moves
Este artículo también está disponible en español. A popular cryptocurrency exchange platform foresees an outsized market rally for altcoins in the upcoming weeks after Do
Bitcoin, Ethereum Technical Analysis: Bitcoin Rebounds, Coinbase Confirms Holding 2 Million BTC
Bitcoin, Ethereum Technical Analysis: Bitcoin Rebounds, Coinbase Confirms Holding 2 Million BTC Bitcoin moved back above $16,000 on Nov. 23, as markets continued to react to the ne
Ana Paula Pereira2 hours agoFederal Reserve of San Francisco hiring crypto architect for CBDC projectSan Francisco"s Federal Reserve Bank is seeking a crypto architect for a central bank digital currency (CBDC).890 Total
Stablecoin Economy Growth Stagnates for 73 Days, USDC Market Cap Slides 5% Lower
Stablecoin Economy Growth Stagnates for 73 Days, USDC Market Cap Slides 5% Lower Since the Terra stablecoin fiasco in May, the top stablecoins by market capitalization dropped 10.6
Tom Mitchelhill7 hours agoBrazil’s Congress puts Binance CEO CZ in crosshairs for indictmentA congressional committee has recommended that Changpeng Zhao and three local Binance executives be indicted for fraud and oth