The Coinbin cryptocurrency exchange out of South Korea is no more, thanks to one man. The exchange has suffered million-dollar losses after the individual charged with maintaining crypto balances, who was also its former CEO, reportedly embezzled its funds. The greed of one individual has, once again, caused many to suffer.
Coinbin has filing for bankruptcy after losing around $26 million in funds. According to the company’s CEO, Park Chan-kyu, all settlements have already been halted and will await the outcome of bankruptcy procedures. He adds, “We are preparing for bankruptcy due to a rise in debt following an employee’s embezzlement.”
That employee reportedly took control of a wallet that contained more than 100 Ether. He claimed that the wallet address had been “lost.”
Coinbin was previously the Youbit exchange. That exchange was hacked in December 2017, resulting in around one-fifth of its holdings being stolen. It had also been attacked in April of that year, with around $35 million in crypto taken. After the last hack in December, it filed for bankruptcy and then reemerged as Coinbin a few months later.
Youbit tried to purchase crypto insurance only 20 days before announcing its bankruptcy. This led to many asserting that the exchange was trying to commit insurance fraud, but it became an irrelevant point. The insurance company, DB Insurance, denied the claim, asserting that Youbit had not disclosed certain details to underwriters. Youbit hit back, arguing that DB Insurance used the hack as an excuse not to pay out the policy’s coverage.
Through Coinbin’s bankruptcy, the company will figure out how to compensate its customers. It has reportedly stated that it will issue payments of $2.05 million to its current users, as well as $24.13 million to Youbit customers.
The crypto ecosystem is improving, but it still needs some work. There are mechanisms in place now that could help businesses better protect their customers’ assets, but only if they’re employed. Multi signature wallets should be standard use in any exchange so that no single individual controls the access. In addition, business leaders should be smart enough not to keep sole control in case they die, leaving thousands of customers out millions of dollars.
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