Business

Dennis Wafula

Coinnest execs face bribery charges over unfair crypto listing

Two executives of South Korean crypto exchange Coinnest have reportedly been indicted over bribery charges.

According to news outlet Korea IT Times, Coinnest CEO Kim Ik-hwan and COO Cho have received a total of KRW1 billion ($890,000) worth of BTC and S Coin from the CEO of the alt coin, a man also named Kim, in exchange for S Coin’s “unfair” listing on the exchange. By unfair, authorities said Coinnest listed the alt coin without examining its technology to hasten the process.

The Financial Investigation Department of the Seoul Southern District Public Prosecutor’s Office said that the two Coinnest executives have been charged with ‘accepting and receiving a bribe,’ while the S Coin CEO has been hit with charges of “giving bribery… to help with the virtual currency listing process.”

Investigators said the duo from Coinnest initially received 110 BTC worth KRW860 million ($771,270) last Feb. 5 and 6. The two also received 2 million S Coins worth KRW70 million ($62,778) each on Feb. 12 and 14.

According to Yonhap, “The prosecution believes that the executives provided the issuer of S coin with the ‘unfair’ convenience of listing the coin.”

This wasn’t the first time the two Coinnest executives were accused of controversial dealings. In April, Kim was arrested in Seoul over allegations of embezzling customer funds. The executives were also suspected of selling none existent coins, and Coinnest’s Kim has been accused of siphoning funds from customer trading accounts and funneling them into his own account.

Around the same time, Coinnest announced that it would opt out of self-regulation under the guidance of the Korean Blockchain Industry Association under which all major crypto exchanges in South Korea are jointly guided. Of the 23 exchange members, 12 announced that they had completed self-inspection under the auspices of the Blockchain Industry Association, and Coinnest was conspicuously missing from the list.

The Korea Internet and Security Agency (KISA) and the Korean Ministry of Science and Technology however announced in August that Coinnest was one of the crypto exchanges that successfully implemented short term security measures.

Note: Tokens on the Bitcoin Core (SegWit) chain are referenced as SegWitCoin BTC coins. Altcoins, which value privacy, anonymity, and distance from government intervention, are referenced as dark coins.

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