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Accusations Pile Up Against ‘Big’ South Korean Exchange

Tim Alper
Last updated: | 2 min read

The storm around an unnamed major South Korean cryptocurrency exchange is continuing to rage – with a senior politician allegedly involved, an ongoing assault/kidnapping case ongoing and now claims of artificially inflated trading volume figures.

Source: iStock/luckyraccoon

As previously reported, the head of a major exchange has recently been charged with assaulting one of his employees in an incident that allegedly took place in February this year.

The CEO, say police, refused to let the employee in question leave the company building for up to 10 hours, physically attacking and extorting the employee, as well as issuing verbal threats to other staff members. The CEO, surnamed Choi, is thought to have suspected the employee in question of insider trading.

But further details from the case have now emerged, with news agency Yonhap, media outlet Money Today and Fn News reporting that an unnamed politician is also at the heart of the debacle.

The politician, who once held a top administrative post in the presidential office, served on the company’s managerial board – but has since left to found a new crypto exchange.

While the politician was serving on the exchange’s managerial board, say officials, the board was complicit in a scheme that involved encouraging employees to make trades on the platform – driving up trading volume numbers.

Police say that a group of customers has also brought a civil case against the exchange, saying that it has reneged on promises to reward buyers of certain tokens with airdrops in major cryptocurrencies.

The company is said to have run this event from August last year to January 2019, with customers alleging they are yet to receive their rewards.

For legal reasons, South Korean media outlets have been restricted from revealing the name of the exchange involved, or the full name of the CEO. But news agencies are describing the exchange in question as “famous,” “major” and “top-level.”

Yonhap says it has been in touch with the exchange in question, which says it does not want to inform its customers as no wrongdoings have been proved.

Jaewon Choi is the CEO of Bithumb. The company did not respond to our earlier request for comment, while a spokesperson for Upbit confirmed to that their CEO has not been arrested. Coinbit also refuted the claims, stating that the “CEO named Choi” that the police has named is not the head of its exchange.