South Korean Authorities Formally File Fraud Charges Against Coinbit's Executives – Bitcoin News


South Korean Authorities Formally File Fraud Charges Against Coinbit's Executives

In South Korea, authorities have formally pressed fraud charges against the chairman of a major crypto exchange in the country, Coinbit, plus two unnamed executives of the firm. They are suspected of price manipulation.

Coinbit’s Executives Formally Charged by South Korean Authorities

According to Newspim, the 5th Investigation Team of the Seoul Metropolitan Police Agency made the official announcement. The same local media outlet quoted the country’s prosecutors, who are preparing themselves for the case, as they believe the executives participated in market manipulation “on multiple occasions.”

Among the charges, the prosecution included forgery of records and fraud. As the investigation is still ongoing, South Korean law requires that media outlets still refer to Coinbit’s chairman as “Mr. A.”

Police believe that from August 2019 to May 2020, all three executives allegedly used a “ghost account” to inflate the transaction volume to manipulate coins’ prices.

Alleged ‘Wash Trading’

As previously reported by, “wash trading” allowed the three people involved in the scheme to earn over 100 billion won ($84 million at that time) in profits fraudulently.

Wash trading is a form of market manipulation in which an investor simultaneously sells and buys the same financial asset to create misleading, artificial activity in the marketplace. It is illegal in most jurisdictions, including South Korea, and it also applies to the crypto market.

Back on Aug. 27, South Korean police raided and seized the headquarters of Coinbit in Gangnam-gu and Seoul. However, in a statement sent during that same week of the raid to, Coinbit clarified its legal status in this matter:

Coinbit has not committed any illegal acts so far and has not been suspended by this time. No one, including Coinbit’s chairman, has been indicted or seized by the police on fraud charges. This case was a personal crime committed by some employees who had joined the company for their financial interests.

As of press time, a date has not been set for the future trials that the three accused executives must appear before a judge.

Tags in this story
coinbit, Fake trades, initial exchange offering, market manipulation, Police Investigation, Police raid, Retail traders, South Korea, wash trading

Do you believe this case will hurt the South Korean crypto industry? Let us know in the comments section below.

Felipe Erazo

Born in Colombia, Felipe earned a degree in journalism at the University of Chile with the highest honor in the overall ranking and holds a Bachelor of Arts in Social Communication. He is a writer with more than nine years of experience, first in the Forex field and later in the crypto industry as an analyst/news junkie. Among his interest topics include human rights, decentralization, financial markets, geopolitics, sports, and new technologies. An inveterate traveler, and always attracted to a good plate of food.

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