Coinone Staff Placed Under Arrest Amidst Bribery Allegations

Table of Contents

• Coinone Under The Scanner
• Details Of The Fraud
• One Of The Big 4
• No Repeat Of The Do Kwon Saga

South Korean authorities have taken several staff members of the cryptocurrency exchange Coinone for breach of trust and other criminal acts.

Coinone Under The Scanner

High drama took place at Coinone after it emerged that the exchange’s executives could go to prison. Prosecutors in South Korea have claimed that the executives in question had received billions to list specific cryptocurrencies on their platform. As a result, authorities detained several employees of the exchange. Coinone is one of the leading cryptocurrency exchanges in the country, often counted among the Big 4 crypto exchanges in South Korea. The arrest warrants were issued by Seoul Southern District Court Chief Judge Kim Ji-Sook, who stated that the employees in question could escape and deemed it necessary to detain them.

According to the authorities, the head of Coinone’s listing division, Kim Mo, broke the Concealment of Criminal Proceeds Act. He also faced allegations of breach of trust, along with another individual, Hwang Mo.

Details Of The Fraud

As a listing broker, Hwang allegedly paid 2 billion won ($1.5 million) to Kim. These transfers were bribes in exchange for Kim listing specific cryptocurrencies on the Coinone platform. Authorities stated that the ex-director of Coinone, Mr. Jeon, also received payments to facilitate listing certain assets and circumvent listing procedures outlined for the exchange.

Investigators claimed that one of the coins listed on the exchange could also be tied to a possible murder. “Furever Coin” listed on the exchange was tied to a possible murder in a case that involved the kidnapping of a 48-year-old individual from the Gangnam District of Seoul. Authorities suspect that the murder was in retaliation to a major crypto investment on Coinone that did not go as planned.

One Of The Big 4

Coinone was founded in 2014 by Kevin Cha with the goal of serving crypto users based in South Korea. The exchange soon expanded to other countries, such as Indonesia, by 2017. Along with other exchanges such as UPbit, Bithumb, and Korbit, Coinone is part of South Korea’s infamous Big 4 crypto exchanges. Together, the four platforms handle over 90% of the crypto trading volume in the country. South Korean regulators had recently mandated several stricter rules that exchanges operating in South Korea needed to abide by. Coinone, along with a few other platforms, had fulfilled these requirements.

South Korea was in the spotlight earlier in the week as well, following the GDAC hack. The platform lost nearly $13 million, which accounted for nearly 23% of the assets it had under its custody. GDAC has blocked deposit and withdrawal methods and has reported the issue to the relevant authorities.

No Repeat Of The Do Kwon Saga

South Korean authorities are keen to avoid a situation similar to the collapse of Luna/UST. As a result, authorities are far more determined to tackle crime and fraud when it comes to the cryptocurrency ecosystem in South Korea. Investors and agencies have blamed Kwon for being the mastermind behind the collapse of Luna and insist he faces the law. However, Do Kwon did not cooperate and went into hiding, with several counties such as Singapore, Russia, Mauritius, and Dubai mooted as possible destinations.

A notice issued by the South Korean authorities and Interpol had no effect, and his whereabouts continued to remain unknown, with speculation that he was hiding in Serbia. Do Kwon was finally arrested in Montenegro and was charged by American prosecutors with commodities fraud, securities fraud, and conspiracy. However, it remains unclear if Do Kwon will face these charges in the United States of America or his homeland. 

South Korean authorities have come down heavily on cryptocurrency exchanges in the past as well. In February, authorities arrested the de-facto owner of Bithumb, the country’s largest cryptocurrency exchange, on charges of embezzlement and stock manipulation. Other executives of the exchange were also on the radar of the authorities.

In January, authorities targeted another crypto exchange, V Global, arresting several executives after regulatory authorities filed a case.

Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.