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A cryptocurrency exchange in South Korea has been sued over its alleged price-pumping schemes that involves token issuance. According to ZDnet Korea, Aone, a South Korean law firm, filed a complaint against Cashierest operator Newlink Co. Ltd., claiming that the exchange’s token violated the capital markets laws in the country.

The lawsuit, filed last Oct. 5, alleged that Cashierest engaged in “criminal pumping, the so-called ‘cage pumping,’ which induces price increases while restricting the withdrawa” of its dividend coin called CAP,” according to the news outlet. Aside from paying dividends, CAP also offers rebates on transaction fees.

Aone claimed the crypto exchange was involved in two illegal acts: the first was “violation of the securities issuance procedure,” under Article 119 of South Korea’s Capital Markets Act. The second was violation Article 178, which prohibits unfair trading.

The token in question was first issued in August. CAP has three features—dividents, referral mining, and trade mining. Its whitepaper claimed that CAP investors “can receive 100% of profits of Cashierest’s exchange charges,” while charges issued with each currency (KRW, BTC, ETH, and TUSD) will be 100% refunded in applicable currency.

On its website, Cashierest explained that CAP “pays the first dividend in KRW,” and that 100% of Cashierest transaction fee revenue” will be paid “in proportion to the customer’s CAP reserves by two snapshots a month.”

Aone claimed these, along with the other features listed on the Cashierest website, violate South Korean laws.

It seems Cashierest is not the only exchange involved in these illegal activities. According to Money Today, the law firm also plans to extend the lawsuit to include other exchanges such as Coinzest, Bithumb, and Coinbit.

Early this year, Cashierest made headlines after it was revealed that its users were allowed to withdraw up to five times their coin holdings due to a system glitch.

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