Korean Crypto Exchange Executives Fake Trading Volumes, Earn Prison Sentences

Korean Crypto Exchange Executives Fake Trading Volumes, Earn Prison Sentences
Image: Shutterstock

Two major executives of Komid, a cryptocurrency exchange platform based in South Korea, have been sentenced to prison, according to a report by local Korean news outlet Blockinpress.

The two individuals were convicted of falsifying trading volumes on the exchange. Choi Hyunsuk, CEO of Komid, is one of the indicted individuals. He was given a three-year sentence for his role in the scam, while the other executive, In-House Director Park Mo, is set to be jailed for two years as well.

Fake Accounts and False Orders

It was reported that Choi and his partner created well over five accounts on the exchange and were using these accounts to make trades, with the purpose of inflating the daily trading volume estimates on the exchange. Choi was also accused of developing a cryptocurrency bot application and installing it on the platform to make large trade orders.

This way, investors were tricked into believing that the platform had a high volume of trade going through it. The two officials were later brought up on charges of fraud, financial misconduct, and embezzlement.

The executives engaged in wash trading to artificially create non-existent trading activity. Pic: Shutterstock

The charges from the prosecutors claimed that the two fabricated 5 million transactions on the platform, while also giving its customers a perception that the increase in daily trading volume was organic. The two reportedly earned $45 million from the scam.

Upon sentencing, the judge who presided over the case said, Choi has committed fraud for a countless number of victims for a long period. Furthermore, he holds the financial authorities responsible for failing to keep track of the industry better.

Wash Trading- A Deceptive Tactic Destroying Trust

Wash trading, as it is usually called, is the act of creating artificial trading activity on a trading platform of any kind. It is quite commonplace in the crypto industry, although this is the first time that a crypto exchange executive is being jailed for it.

In his remarks, the judge also stated that this case has further damaged the confidence of investors and customers in the crypto exchange, and it has the potential to develop a negative effect on the countrys digital asset trading market as well.

Upbits Elaborate Scam

Various crypto exchanges have been caught making use of the very same deceptive methods to make false orders. In December 2018, officials of Upbit, one of the largest crypto exchanges in South Korea, were charged with similar fraudulent activities. According to the report, three officials of the company, including the Board Chairman and Finance Director, faked orders to the tune of over $260 billion. In addition to that, they reportedly sold 11,500 BTC to thousands of investors, pocketing $132 million in the process.

22.01.2019 / 01:30 48
Executives of Korean Exchange Sentenced to Jail for Faking Volumes Executives of Korean Exchange Sentenced
Two executives of a South Korean cryptocurrency exchange have reportedly been sentenced to jail for inflating trading volumes on their exchange. The
Upbit Denies Cryptocurrency Wash Trading Accusations Upbit Denies Cryptocurrency Wash
South Korean authorities recently alleged that top executives of cryptocurrencyexchange company, Upbit, falsifiedthe companystrading volume. Company
Officials at Top Korean Cryptocurrency Exchange Upbit Indicted for Fraud Officials at Top Korean Cryptocurrency
Officials at South Koreas largest cryptocurrency exchange, Upbit, have been indicted for fraud. They allegedly made bogus crypto orders worth
South Korea: Trading Volume Soars as Bithumb Reopens to New Customers South Korea: Trading Volume Soars as
Major South Korean cryptocurrency exchange Bithumb has announced it will resume accepting new user accounts after resolving a dispute with its
Koreas Supreme Court Orders Seizure of $1.4 Million in Bitcoin in Criminal Case Koreas Supreme Court Orders Seizure of
South Korean authorities are cleared to confiscate 191 bitcoins, about $1.43 million, from the operator of a child pornography website in addition to
South Koreas Biggest Cryptocurrency Exchange Investigated by Local Police, Market Drops South Koreas Biggest Cryptocurrency
UPbit, South Koreas biggest cryptocurrency exchange, was investigated by local police and 10 investigators after its headquarters in Seoul were
Comments (0)
Add a comment
Comment on