Komid Exchange Executives Face Jailtime over Faking Volumes
Seoul – Two leaders from the Korean cryptocurrency exchange Komid were sentenced to serve time in jail for their roles in orchestrating fraudulent trading volume reports on their platform. The pair allegedly used a bot to fake large orders in both cryptocurrencies and Korean won.
The CEO of the company Choi Hyunsuk received a 3-year sentence while another company head named Park was sentenced to a 2-year sentence for fraud, embezzlement, and misconduct. This is the first time a representative of a digital currency exchange has been sentenced to prison for allegedly inflating trading volumes.
Komid began operations on Jan. 5 last year after beta test runs. According to the court, Choi made more than five fake accounts in January last year and inflated trading volumes in both cryptocurrencies and Korean won on his Bitcoin exchange.
The charges from prosecutors outlined a scheme wherein the two defendants fabricated 5 million transactions on their platform to deceive investors into assuming that the volume was organic. This led to the two earning about $45mil. There is also a speculation that they utilized a “bot” to automatically create large orders, which attracted new users.
The judge said,
“Choi has committed fraud for a countless number of victims for a long period of time…. Furthermore, he holds the financial authorities responsible for failing to keep track of the industry better.”
On the other hand, last month a similar executive of the domestic cipher currency exchange business was accused of allegedly being indicted. Some executives of Upbeat are accused of creating fake membership accounts and manipulating the accounts as if the physical assets were deposited.
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