3 Korean Crypto Exchanges Get Raided by Prosecutors

The Seoul Southern District Prosecutors' Office has raided three crypto exchanges on suspicion of their embezzling client funds.

South Korean prosecutors stormed the premises of three cryptocurrency exchanges in Seoul earlier this week after a government investigation raised suspicions that top executives at the exchanges were shifting client assets into their personal accounts, local media outlet Chosun reported.

Citing a spokesman for the prosecutors’ office, Chosun said the raids took place from Monday to Wednesday.

During the raid, officials impounded computer HDDs, mobile phones, and records related to transactions and accounting, head prosecutor Jeong Dae-jeong was quoted as saying on Friday by the Wall Street Journal.

“It’s unclear yet whether the transactions can be seen as embezzlement,” he said.

Jeong would not disclose the amounts transferred and the names of the targeted exchanges. He only revealed that one of them operates out of Seoul’s financial district Yeouido, which is known to house the headquarters of Coinone, one of the largest South Korean crypto exchanges.

The inquiry has discovered that one of the exchanges used customer funds to buy Bitcoin from competitors.

The Korea Blockchain Association, a consortium that comprises 30 local crypto services, had yet to issue any comments by the time of publication.

For the past few weeks, the South Korean government has been considering different approaches to impose control on the local crypto market. At one point, some politicians even entertained the idea of a full crackdown.

The country is among the leading crypto nations along with Japan, US, and Switzerland, and the South Korean won is one of the most widely used fiat currencies for buying Bitcoin.

Part of the reason why South Korea has become so attractive for crypto investors is that China, which was previously considered a crypto paradise, has shut down all local crypto exchanges and banned initial coin offerings (ICOs). More recently, it entirely prohibited crypto activity, even peer-to-peer trading.

At the end of January, Korea’s Financial Services Commission came up with new rules for crypto traders and operators, making it illegal to trade anonymously.

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