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South Korean officials file fraud charges against Coinbit’s executives

According to the latest update, South Korean officials press fraud charges upon Coinbit’s chairman, plus two unnamed executives. Coinbit is one of the largest South Korean Crypto exchanges. They are targeted as the prime suspects of price manipulation. Per Newspim, the 5th Investigation Team of the Seoul Metropolitan Police Agency declared the charges in an official statement. Therefore, the prosecutors are developing a case against Coinbit’s chairman, Choi Mo, and two executives on custody of fraud and forgery related to market manipulation.

However, the investigation is still in process. South Korean law has advised the local media outlets to represent Coinbit’s chairman as “Mr. A.” From August 2019 to May 2020, the South Korean police state that all the three executives supposedly employed a “ghost account” to increase the transaction count in the quest to manipulate the prices of the coin.

South Korean Police raided Coinbit’s headquarters.

On Aug. 26, South Korean police conducted a raid at the headquarters of Coinbit in Gangnam-gu and Seoul. The police accuse the exchange’s owner Choi Mo and other managers of wash trading. This fraud enabled the executives in personal gain worth 100 billion won ($84 million) in wash trading profits. Wash trading is a sort of market manipulation in which an investor concurrently trades and purchases the same financial asset to generate artificial activity, thus misleading the marketplace. Therefore, it is prohibited in most provinces, including South Korea. Moreover, it is also applicable to the cryptocurrency markets.

Nonetheless, an investigation by Seoul Shinmun, a local news outlet, Coinbit, did not display similar deposit and withdrawal details for various crypto transactions. Moreover, they supposedly blocked transactions with other exchanges. Coinbit’s chairman and others manipulated the market by acquiring and selling large quantities of tokens at a pre-determined price.

Regarding Coinbit, the exchange is functionally divided into two operational accounts, including all user funds, informed the South Korean police. Coinbit’s staff used the first account associated with major cryptocurrencies like bitcoin, ethereum, ripple, and tether to transfer funds in ghost accounts internally. However, the finalization of future hearings date for the case is yet to come regarding the three executives’ arrest.

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