Two executives at Komid, a Korean cryptocurrency exchange are facing a jail sentence. The duo allegedly faked the trading volume of cryptocurrencies on the platform. As such, the law court has sentenced them for “fraud, embezzlement, and misconduct”, according to a local media outlet’s report on January 21.
Falsifying Trading Orders Using Bots and Creating Fake Accounts
Reportedly, Choi Hyunsuk, CEO of Komid and Park, the company’s head used bots to falsify orders on the exchange. The duo who had launched platform on January 5 was also said to have created five different fake accounts to achieve this purpose. As a result, this led its customers to believe that there was a high level of interest in certain virtual currencies.
Per the report, the defendants were able to fabricate 5 million transactions on Komid which earned them $45 million. Therefore, the Korean court has charged them for “fraud, embezzlement, and misconduct.” In the same vein, the CEO and the company’s head will be spending 3 years and 2 years in jail respectively.
According to the judge:
“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.”
First Operators of Korean Cryptocurrency Exchange to be Jailed
Furthermore, reports reveal that it is uncommon for an operator of a digital exchange in the region to be sentenced to prison on the counts of falsifying trades. However, one can assume it is because of the increase in the level of crime on exchanges and the stringent laws that have been put in place.
A similar case to this is that of Upbit, a virtual currency exchange where three of its executives were indicted in December. Here, the Seoul Southern District Prosecutors’ office charged the trio for manipulating transactions and creating fake orders amounting to $226.2 billion.
CEO of Coinflux Also Faced Legal Charges
On January 7, BTCNN also reported that the Romanian high court had extradited Nistor Vlad Călin, the CEO of Coinflux to the U.S. This was after allegations were made against him by the U.S secret service that he was a part of a Romanian group that scammed some U.S. citizens.
BTCNN on September 28 also made reference to Wall Street Journal’s report which states that a number of companies are using their exchange for criminal activities. So far, about $88 million have been laundered from such exchanges.