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Komid Crypto Exchange Executives Received Prison Sentences For Fraud

21 January 2019 10:25, UTC
Komid Crypto Exchange Executives Received Prison Sentences For Fraud

Two managers of Komid, the South Korean cryptocurrency exchange, were sentenced to imprisonment for faking trading volumes, News Asia reports. Allegedly, they were using a trading bot to falsify orders in cryptocurrencies as well as in Korean won.

Komid Exchange CEO Choi HYUNSUK received a three-year prison sentence, while another executive was sentenced for two years. This case became the first one regarding imprisonment for inflated trade volumes. According to the investigation, managers created more than five false accounts in January 2018 and have manipulated trading volumes on the exchange since that. The prosecution claims that 5 mln transactions were fabricated on the platform, which resulted in investors’ misleading.

The court took into account the fact that the damage was reduced since some funds were returned. In addition, the court considered that "the defendants did not appear to have committed a crime with strong fraudulent intentions." Nevertheless, the conclusion was strict:

"The crime has damaged customers’ confidence in the virtual currency exchange and has had a negative effect on the domestic virtual currency trading market."

The accusations of manipulating the trading volumes are not uncommon on the South Korean crypto market: Upbit crypto exchange officials were also indicted for fraud with bitcoin orders faking last December. Upbit has denied the allegations.

Image courtesy of Blog Leoprime

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