Court Charge Former Coinone Employees with Fraud
- Coinone plays a leading role as one of the biggest cryptocurrency exchanges in South Korea.
- Prosecutors charged the parties involved with obstruction of trade and breach of confidence.
Four people, identified in court as Mr. Jeon, Mr. Kim, Mr. Ko, and Mr. Hwang, all of whom worked for the South Korean cryptocurrency exchange Coinone, were charged on May 22 with using illegal methods to profit more than 2.98 billion Korean won ($2.26 million) from token listings. Reports claim that the operation took place between November 2019 and December 2022, involving about 46 tokens.
Prosecutors revealed that before a coin was listed, Coinone officials and employees forced projects to sign a market-making (MM) contract with a specific MM firm through brokers. The agreement allegedly served as a guarantee of adequate trading volume once the tokens were listed.
However, prosecutors claim that Coinone’s executives engaged in criminal activity and manipulated trade volume and prices through cross-trading. Prosecutors also claimed that the executives pledged to remove “listing deposits” for projects that agreed to such contracts.
According to South Korean prosecutors,
This price manipulation creates misunderstandings about the trading volume and market price among general members of the exchange and induces them to participate in the coin transaction and buy the coin.
The news comes amid concerns about the growing malpractices among crypto companies. Regulators globally are proposing rules to regulate the industry and curb malpractice. So far, the European Union has successfully launched a comprehensive policy for digital assets. Meanwhile, other regions have yet to approve a uniform standard for the industry.
Lawrence has covered some exciting stories in his career as a journalist, he finds blockchain-related stories very intriguing. He believes Web3 will change the world and wants everyone to be a part of it.
