Police accused Coinbit’s president, Choi Mo, and two other executives of fraud and forgery linked to market manipulation
South Korean authorities have accused the leaders of what was once the third largest exchange in the country, Coinbit, of market manipulation.
According to News1, the PMs are preparing a lawsuit against Coinbit’s president, Choi Mo, and two still anonymous executives: the allegations are of fraud and falsification linked to market manipulation. According to the Metropolitan Police Agency in Seoul, from August 2019 to May 2020, the three of them used ghost accounts to inflate transaction volumes and manipulate token prices on the exchange.
Police confiscated Coinbit’s properties in a series of searches in August. At the time, authorities estimated that 99% of the exchange volume had been falsified through Bitcoin (BTC) and other crypto „wash trading“: those responsible for the fraudulent activities would have cashed in more than $84 million.
An August survey by the Seoul Shinmun press found that Coinbit did not show details of deposits and withdrawals corresponding to major crypto transactions, and also blocked transactions with other exchanges. This would have allowed Coinbit’s president and others to manipulate the market by buying and selling large amounts of tokens at specific times.
According to Thomas Reuters Practical Law, committing fraud in South Korea using unfair trading practices such as providing inaccurate market prices can result in a prison sentence ranging from five years to life imprisonment if the profits made from such fraud are more than 5 billion South Korean won, approximately $4.6 million. In addition, offenders may be fined „up to the amount of the profits made“.