Coinnest exchange shuts down after series of embarrassing incidents

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This will come as an absolute shock to about zero people. The Coinnest cryptocurrency exchange, the fifth largest in South Korea, has closed its doors. The company announced the closure last Thursday, adding that it had already cut off new account creation capabilities as of April 16. Trading and deposits will be cut off at the end of this month and all funds must be withdrawn by the end of June.

According to the announcement, all transactions will and deposit payments will cease as of 5 p.m. local time on April 30. From now until June 30, when withdrawals stop, Coinnest has “lowered the withdrawal fee and the minimum withdrawal amount to support your smooth withdrawal.” It adds, “Please be sure to withdraw your assets before the withdrawal date. It is difficult to withdraw after [the withdrawal date].

Looking at the exchange’s history from last year, the closure is no surprise. Last April, the exchange’s co-founder, Kim Il-hwan, was arrested on embezzlement charges. Executives from the company faced bribery charges last September over the “unfair” listing of the S Coin digital currency. The company’s CEO and its chief operations officer allegedly received a total of $890,000 to list the coin.

This past January, the exchange reportedly suffered a “computer glitch” that led to an airdrop of $5.3 million in Bitcoin Core (BTC), money that was never meant to be released. The airdrop was meant to only release We Game tokens, not BTC.

In addition to those problems, the softening of the crypto market has seen three of the big four crypto exchanges in South Korea suffer major losses. Only Upbit saw a profit last year, while Coinone, Korbit and Bithumb reported losses. Upbit reportedly made over $87 million.

Upbit’s success was, and still is, a little suspect. The company spent a large amount of time last year defending itself over fraud accusations and saw its main office in Seoul raided by police in May. That led to a massive run on withdrawals from the exchange, with reports that the company had listed currencies it didn’t include on its balance sheet. Despite the number of withdrawals, it was still able to turn a profit while the others suffered.