South Korean Crypto Exchange Governors Detained for Customer Funds Embezzling

April 6, 2018

On April 5 South Korean police detained four executive board members of two local crypto exchanges on a charge of client funds embezzlement.

Kim Ik-hwan, CEO of Coinnest exchange, turned to be among those arrested, while identities of the rest as well as the name of the second exchange are still kept secret.

As the country’s prosecutor office has reported, the detained are questioned on the matter of embezzling billions of wons from the customer accounts with successive transfer to own accounts.

Coinnest exchange has published a message saying that it will function as before while the exchange will be managed by other persons with the aim to protect customers’ funds and establish favorable conditions for trading. The company promised to carry out an independent audit of clients’ accounts and publish the results in the nearest time.

Note that according to Coinmarketcap Coinnest is among top-50 crypto exchanges by trade volume.

Remember, in March prosecutor’s office of the Southern district of Seoul was reported to conduct inspections of three crypto exchanges having confiscated hard drives, smartphones and documents as evidence. Names of those exchanges were not disclosed, but their executives were also suspected to embezzle clients’ funds.

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