Report: South Korean authorities charge Coinbit executives with market manipulation

Police authorities in Seoul have reportedly brought charges against crypto exchange Coinbit’s chairman and two unnamed executives, according to the South Korean news company Newspim. 

The country’s prosecutors are preparing a case against the executives, claiming they engaged in market manipulation. From August 2019 to May 2020, police allege the executives used a ghost account to blow up transaction volume and alter coin prices, per the report.

This fraud earned the executives around 100 billion won ($84 million) in wash trading profit. Wash trading is a form of market manipulation whereby an investor buys and sells the same financial asset at the same time to make the marketplace appear more active than it is. Around 99% of Coinbit’s volume transactions were allegedly conducted in the name of wash trading, according to Seoul Shinmun. 

The South Korean authorities reportedly seized and searched the Coinbit headquarters in Gangnam-gu, Seoul, on August 26 to investigate the company after learning about potential fraud.