South Korean Crypto Exchange Coinbit Seized Over Allegations of Massive Wash Trading

Gangnam, Seoul (CJ Nattanai/Shutterstock)

Coinbit, South Korea’s third-largest cryptocurrency exchange, has reportedly been seized by police over allegations it faked most of its trading volume.

  • According to a report from Seoul Newspaper on Tuesday, local police raided and confiscated the company’s Gangnam headquarters and other premises.
  • Accused of fraud, the firm’s owner, Choi Mo, and other managers are said to have artificially inflated volumes on the exchange by using “ghost” accounts to make fake trades, a practice known as wash trading.
  • In its report, Seoul Newspaper said it had been informed by insiders of corruption at Coinbit months ago and that up to 99% of trading volume was “manipulated” on the platform.
  • Police allege wash trading at Coinbit had produced over 100 billion won ($84 million) in faked income.
  • The newspaper said it had put off reporting its findings until the raids at the request of the Investigation Department of the Seoul Metropolitan Government.
  • An accounting firm had reportedly refused to work with the firm after viewing its books.
  • Seoul Newspaper said it had seen the books and that 99% of recorded trades could not be associated with deposits or withdrawals.

Also read: Executives at Korean Crypto Exchange UPbit Indicted for Fraud

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