Leaders of South Korean Exchange Coinone Indicted for Market Manipulation Scandal
Four individuals have been indicted in connection with a listing scandal at the prominent South Korean cryptocurrency exchange, Coinone. The news broke on May 21, sending shockwaves through the country’s crypto industry and raising concerns about the integrity of the market. The indictments involve two executives, two brokers, and potentially others who played a role in this elaborate scheme.
Leading the list of the accused are Coinone’s listing team leader, Kim Mo, and listing broker, Hwang Mo. Both individuals have been formally indicted by prosecutors. Additionally, two others involved in the scandal have also faced indictments, although their specific roles have not been disclosed at this time. The former Chief Sales Officer (CGO), Jeon Mo-ssi, was subject to investigations, but it remains uncertain whether he will also face charges.
According to the prosecutors’ findings, Coinone executives were found to have accepted substantial payments in exchange for listing at least 46 cryptocurrencies on their platform. Shockingly, these 46 coins accounted for a staggering 25% of all cryptocurrencies listed on Coinone. Prosecutors warn that the number of affected cryptocurrencies may rise as investigations continue, revealing the depth of the deception.
The scandal took an even more sinister turn when it was revealed that Coinone executives actively engaged in market manipulation. They reportedly encouraged listing parties to enter into contracts that required them to route orders through market-making firms. These firms, in turn, manipulated prices and artificially inflated trading volumes through cross-trading. As an incentive, Coinone waived the listing deposit for parties signing such contracts.
The implications of this market manipulation are far-reaching. By falsely inflating trading volumes and misleading users about the actual value of listed cryptocurrencies, Coinone effectively duped its customers and distorted the market’s perception. This unethical practice undermines trust in the entire cryptocurrency ecosystem and raises concerns about the transparency and reliability of other exchanges in the industry.
Prosecutors handling the case have emphasized the unprecedented nature of the charges, noting that they have not previously encountered a fraud case related to illegal market-making in the cryptocurrency market. This scandal serves as a wake-up call for regulators, highlighting the need for increased scrutiny and stricter oversight to prevent similar incidents in the future.
Coinone, once considered a reputable and trusted cryptocurrency exchange, now faces severe reputational damage and potential legal consequences. The impact of this scandal on the broader crypto industry remains to be seen, but it reinforces the urgency for tighter regulations and greater accountability within the sector.
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