South Korea police search for 3 crypto exchange employees

South Korea police search for 3 crypto exchange employees

Three employees, including the representative director, at a South Korean cryptocurrency exchange are now officially wanted by police, following arrest warrants issued this week. The senior employees at cryptocurrency exchange HTS Coin are suspected of being involved in embezzlement and fraud, according to local media reports.

The warrants were issued at the behest of the Financial Investigation Division 2 of the South Korean Prosecutor’s Office, which detailed allegations concerning the CEO, and other senior ranking officials within the company.

The CEO, identified as “Shin,” have been allegedly involved in transferring funds between unrelated accounts, according to the Token Post, which reported that, “According to the prosecution, Shin and his employees are suspected of taking money out of their accounts by transferring customer funds from a bank account to another account.”

The allegations also suggest that the company didn’t hold the cryptocurrency it purported to sell, and “used the money in the customer’s account as a personal account of the exchange.”

HTS Coin posted a response on their website, in a bid to reassure their customers that deposits and coins are available as promised, and confirmed the exchange is liquid should investors be looking to withdraw their funds.

“HTS Coin is currently under investigation by the prosecution and we are working diligently…Unlike external concerns, we still have 100% of your deposits and coins. We keep customer deposits and coins that can be withdrawn promptly even if all customers request a withdrawal at the same time,” according to the exchange.

The officials were cross-examined by police on Monday morning, ahead of the decision to issue the warrants for their arrest.

The decision to prosecute stems from a series of investigations dating back to March, when South Korean authorities decided to focus efforts on three separate cryptocurrency exchanges, also including Coinnest and Komid.

The news emerges at the same time as authorities in South Korea are stepping up their efforts to identify fraud and malpractice in the cryptocurrency space. Just last week, prosecutors opened an investigation against leading South Korean exchange Upbit, and while they were keen to stress there is no suggestion of similar fraud in this case, it shows the growing tendency towards increasing the pressure on cryptocurrency exchanges in South Korea.

New to blockchain? Check out CoinGeek’s Blockchain for Beginners section, the ultimate resource guide to learn more about blockchain technology.