Cryptocurrency News

Korean Crypto Exchange Execs Imprisoned For Defrauding Investors

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As per a January 18 article in a Korean tech news outlet, Blockinpress, two Korean cryptocurrency exchange operators have been confined for deceiving investors. The crypto exchange operatives supposedly exaggerated the volume of dealings taking place on their exchange platform and made false electric records. Another cryptocurrency theft is in the books. These individuals have been arrested in on suspicion of stealing cryptocurrency funds worth more than a million USD.

The crypto arena has always been wrought with theft, and virtual assets seem to attract some of the most malicious players in the industry. Two of the biggest thefts in recent years that likely come to mind include Mt. Gox in February 2014 and Coincheck last January, both of which occurred in Japan.

Hyunsuk Choi, former chief executive officer of the now-defunct Komid crypto exchange, received a three-year jail sentence, whereas his partner, Park, received a biennial jail sentenced for wash mercantilism.

Wash mercantilism is a dirty theme within which a monger buys and sells security merely to confuse the markets and create it seems to be the safety has high mercantilism volume. Choi and Park engaged in wash mercantilism to convert investors that the Komid platform was doing a lot of business and mercantilism than it really was. Though this can be reportedly the primary time a crypto exchange government has been sentenced to jail for wash mercantilism, Choi and Park aren’t the primary to have interaction during this form of dishonest activity.

They confessed that they’d fashioned a pretend crypto-currency company, Future, that secure depositor to triple their deposits in 250 days. They were conjointly running daily-and-weekly payment schemes, such corporation’s square measure illegal in the Asian country.

According to a Dec report printed by the Blockchain Transparency Institute, 70 percent of prime BTC pairs on 80 percent of exchanges have inflated volumes thanks to washing mercantilism. That report expressed, “Many of those exchanges exist entirely to gather these fees whereas their bots run their exchange.” In Dec 2018, Korea-based crypto exchange Bithumb was defendant of victimization the plan of action to incorrectly increase the number of trades on its platform.

According to Blockinpress, Choi and Park embezzled fifty billion won (approximately $45 million) in client fees by making 5 fictitious accounts through that they processed five million pretend transactions. The decide opined that Choi has been committing fraud against investors for a few time and chided the litigant for blaming Korean monetary authorities for not keeping a more in-depth eye on him.

Recent instances of similar thefts enclosed by Blockonomi include a SIM-swapping case where a northern California resident’s phone number was used to steal money from his Coinbase and Gemini accounts. It is projected that the robber stole as much as $1 million, and only $300,000 has been improved at press time.

In addition, a Brooklyn-based man is now facing up to 5 years in prison for supposedly selling phony initial coin offerings (ICOs) to unwary clients.

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