Coinnest Crypto Exchange Boss Arrested for Fraud and Embezzlement

Regulators continue to raid crypto exchanges from early January this year after passing regulations to improve transparency. It raided three others last month on the same suspicion.

CEO Kim Ik-hwan and a senior executive of South Korea crypto exchange Coinnest have been in detention for fraud and embezzlement. The investigators suspect that the two transferred customers’ funds into their own accounts.

The exchange, Coinnest is the fifth largest in the country based on trading volumes.

It is not the first-time authorities are acting on crypto exchanges after passing of a regulation that allows for more transparency in crypto trading and exchanges. Authorities raided three other cryptocurrency exchanges at Yeouido last month on the same suspicions.

More Raids

Additionally, there was a separate raid on cryptocurrency exchanges in January after the passage of the regulation. The regulations came after the country ruled out a total ban on cryptocurrencies. Blue House, the equivalent of U.S.’s White House said it would increase transparency by stamping out illegal activities.

It was good news to not ban cryptocurrencies as tensions eased about the possibility of a ban. The country does command a significant size of the crypto market probably at third in global trading volumes. Hence activities relating to crypto does affect global prices to a large extent. However, anonymous crypto trading is no more and exchanges have to deal with registered banks as of January 30.

The country said it would support the development of blockchain technology. This settled fears that it would ban the technology since it was the basis for cryptocurrencies.

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