South Korean Police detain Crypto Executives over embezzlement, while the office of the prosecutor has stated that the executives are currently being questions in regards to “the embezzlement of billions of won from their clients’ accounts and transferring it to their own.”
6 April, AtoZForex – Reportedly, South Korean police have detained four executives from two cryptocurrency exchanges in regards to the alleged embezzlement. The news emerged this Thursday, stating that those questioned by police included Kim Ik-hwan, the CEO of Coinnest. However, the identities of other executives have not been published yet.
South Korean Police Detain Crypto Executives Over Embezzlement
The office of the prosecutor has stated that the executives are currently being questions in regards to “the embezzlement of billions of won from their clients’ accounts and transferring it to their own.” The news has been first made public by one of the local media reports.
The statement from the prosecutor’s office reads:
“In order to resolve customer anxiety and sincere vocation requirements, the Coinnest Board of Directors has removed the involvement of executive management from the point of the last investigation and has been switched to a specialized management system.
The company also pledged to carry out audits of user accounts via third parties, and to disclose the results in the “near future.”
Coinnest is the fifth largest South Korean cryptocurrency exchange, according to the data from CoinmarketCap.
South Korea Increased Crypto Scrutiny
This news comes amid a heightened focus on cryptocurrency platforms in South Korea from the authorities. Earlier this January, the tax office and police have raided two of the South Korean largest crypto exchanges. Yet, a representative of one of the exchanges, Bithumb, has characterized the case as a “visit” from the National Tax Service.
Furthermore, South Korean cryptocurrency market has seen a rise in the regulatory scrutiny. The nation has moved to ban local entities from conducting initial coin offerings (ICOs) in September 2017. It has also required cryptocurrency investors to identify themselves while using bank accounts for crypto trading.
All these measures come as a response to a rise in cryptocurrency trading volumes in South Korea. This has raised concerns among regulators and government officials.
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