Report: South Korean authorities charge Coinbit executives with market manipulation

Hacks • December 8, 2020, 5:26PM EST
UPDATED: December 8, 2020, 5:31PM EST
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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.

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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.

About Author

MK Manoylov has been a reporter for The Block since 2020 — joining just before bitcoin surpassed $20,000 for the first time. Since then, MK has written nearly 1,000 articles for the publication, covering any and all crypto news but with a penchant toward NFT, metaverse, web3 gaming, funding, crime, hack and crypto ecosystem stories. MK holds a graduate degree from New York University's Science, Health and Environmental Reporting Program (SHERP) and has also covered health topics for WebMD and Insider. You can follow MK on X @MManoylov and on LinkedIn.

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