CEO of South Korean crypto exchange imprisoned for faking volume

20 Jan, 2019 | Updated: 20 Jan, 2019
by Will Heasman
Exchange
CEO of South Korean crypto exchange imprisoned for faking volume

 The CEO of a South Korean crypto exchange, known as Komid, was recently sentenced to 3 years imprisonment due to artificially inflating exchange volume.

According to the South Korean outlet, Blockinpress, both the Komid exchange's CEO, known simply as Choi, and another unnamed employee, were given respective 3-year and 2-year sentences, for various acts of misconduct, fraud, and embezzlement.

The report reveals that the exchange faked over 5 million transactions to artificially inflate volume. This was estimated to have earned the exchange, something in the region of $45 million. 

The presiding judge on the case was quoted as saying:

Choi has committed fraud for a countless number of victims for a long period of time… He holds the financial authorities responsible for failing to keep track of the industry better.”

There have been many accusations and instances of exchanges inflating their own trading volume in an attempt to reel in customers. This artificial trading ploy is known as wash trading.

Another South Korean exchange, Bithumb, was accused of wash trading just last month when the crypto exchange rating provider, Crypto Exchange Ranks (CER) accused Bithumb of falsifying trading data. Something Bithumb virulently denied.

Similarly, in December, Chepicap reported upon research from Blockchain Transparency Institute which relayed that top exchanges including, HitBTC, Huobi and OKex had been participating in wash trading.

Read more: Bithumb denies reports of wash trading; Most top exchanges are inflating their volume; wash trading

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