Police seize South Korean crypto exchange Coinbit for allegedly inflating trading volumes

Exchanges • August 26, 2020, 5:30AM EDT
UPDATED: August 26, 2020, 5:35AM EDT
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The Seoul Metropolitan Police Agency has reportedly seized local crypto exchange Coinbit for allegedly inflating trading volumes.

South Korea's oldest newspaper, the Seoul Shinmun, reported the news on Wednesday, saying that Coinbit's offices have been raided for the alleged fraud. The exchange is accused of using multiple "ghost accounts" to inflate trading volumes.

About 99% of Coinbit's trading volume is said to have been manipulated in recent months, which resulted in "unfair profits" of at least 100 billion won (about $84 million) for the exchange and its team. Coinbit's accounting practices are also poor, per the report.

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Coinbit has now reportedly halted operations amid an ongoing investigation by the police. 

In light of the Coinbit situation, Doo Wan Nam, MakerDAO's business development associate in the Asia-Pacific region, suggested users to trade via decentralized exchanges.

South Korean crypto exchanges and firms are set to face stricter rules from next year as the country recently amended a law that will officially bring cryptocurrencies under its legal system.

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Yogita Khatri is a senior reporter at The Block, covering all things crypto. As one of the earliest team members, Yogita has played a pivotal role in breaking numerous stories, exclusives and scoops. With nearly 3,000 articles under her belt, Yogita holds the records as The Block's most-published and most-read author of all time. Prior to joining The Block, Yogita worked at crypto publication CoinDesk and The Economic Times, where she wrote on personal finance. To contact her, email: [email protected]. For her latest work, follow her on X @Yogita_Khatri5.

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