South Korea Raids 3 Crypto Exchanges in Embezzlement Probe

South Korea Raids 3 Crypto Exchanges in Embezzlement Probe

South Korean prosecutors raided three cryptocurrency exchanges this week over suspicions that staff embezzled funds from customers' accounts, according to local news reports.

Exchange staff, including executives, are suspected of siphoning off money from customer accounts and using it to purchase cryptocurrencies at other exchanges, reported.

The Seoul Southern District Prosecutors' Office reportedly confiscated hard drives, mobile phones, and documents in the search for evidence. One prosecutor was quoted as saying:

"The firms turned up on our radar in January during our investigation of suspicious money transfers between Bitcoin exchanges that were detected during an audit by the Financial Services Commission and the Korea Financial Intelligence Unit."

Another report indicates that the exchanges have been taken over by the country's financial watchdog, theFinancial Services Commission (FSA), and that the operators of the companies are being charged with embezzlement.

The news comes amid increasing scrutiny of cryptocurrency businesses in South Korea, as the country moved to clamp down on what it considered rampant speculation and criminal activities such as money laundering.

In January,the Financial Supervisory Service reportedly indicated it was investigating possible insider trading of cryptocurrencies by its own staff and that it would make public any findings on the allegations.

Later that month, the Korea Customs Service said that a total of 637.5 billion won (around $600 million) in foreign currencies had been exchanged illegally, including unrecorded capital outflows using cryptocurrencies.

Furthermore, initial coin offerings (ICOs) were outright banned last September, although recent reports suggest regulators may be consideringsoftening that stance.

The government has also restricted cryptocurrency trading, outlawing anonymous virtual accounts at the end of January. After that date, only accounts associated with identified users could be accepted via approved banks.

South Korean police image via Shutterstock

15.03.2018 / 07:30 146
South Korea Regulators Considering Reversal of ICO Ban: Report South Korea Regulators Considering
Nearly six months after a blanket ban on ICO (initial coin offering) fundraising, South Korean regulators are reportedly planning to allow ICOs,
Report: South Korea Could Ease Its ICO Ban Report: South Korea Could Ease Its ICO
South Korea's ban on initial coin offerings (ICOs) could be eased in the coming months, according to a new report. CoinDesk reported in September
Japans Financial Regulator Cracks Whip at 7 Cryptocurrency Exchanges Japans Financial Regulator Cracks Whip
Japanese authorities have penalized seven domestic cryptocurrency exchanges following inspections, including a month-long suspension for two
Japans FSA Suspends Two Crypto Exchanges, Coincheck to Start Reimbursing Customers Next Week Japans FSA Suspends Two Crypto
Japans Financial Services Agency (FSA) has told seven cryptocurrency exchanges to improve internal controls, ordering two of them to cease business
South Korean Officials Prohibited From Holding or Trading Cryptocurrency South Korean Officials Prohibited From
MBN, a mainstream media outlet in South Korea, has reported that the South Korean government officially prohibited government officials from holding
Koreas Mandatory Crypto Real-Name System Neglected  19% Conversion Rate Koreas Mandatory Crypto Real-Name
South Koreas real-name system for cryptocurrency trading has been enforced for over a month, but most accounts have not been converted to the new
Comments (0)
Add a comment
Comment on