Executives of Coinone, a top cryptocurrency exchange in South Korea, have been arrested for bribery allegations concerning a token listing. The two executives, listing team leader, Kim Mo, and listing broker, Hwang Mo have both been arrested by the authorities.
This is to ensure that the two don’t leave the country while investigations are going on, something similar to the escape of Terra founder Do Kwon in 2022. For Kim, the charges include violation of the Concealment of Criminal Proceeds Control Act and breach of trust, while Hwang is only charged with breach of trust.
Kim Admits to Receiving 1 billion Won Bribe
The parties involved in the allegations are already cooperating with law enforcement as Kim admitted to taking a 1 billion Won ($756,140) bribe from Hwang. Apparently Hwang is just one of the many brokers Kim has taken a bribe from to facilitate the listing of tokens. Virtual assets for which the bribes were paid include Pica Coin, a token that sought listing on Coinone in 2020.
Hwang had paid a total of 2 billion Won ($1.5 million) to Kim and other executives of Coinone during this time. Such compromises could be why the security of crypto exchanges and other platforms cannot be guaranteed as bribes lead to overlooking of necessary security measures that should be put in place to protect investors.
For example, every crypto exchange has standards that every token must attain to be listed. However with a bribe, such standards can be waived and investors are exposed to unnecessary risks when they trade such illegal tokens, making the crypto industry a dangerous place to tread.
Crypto exchanges in South Korea have also suffered a fare share of attacks which led to the loss of investors’ hard earned money. For instance, GDAC, another crypto exchange in the country recently suffered a hot wallet hack. As a result, $13 million of investment making up 25% of the exchange’s assets under custody was lost.
These attacks, bribery and other allegations are a major dent to the image of the crypto industry which is trying to win the hearts of institutional investors from the mainstream sectors. This explains why regulators in South Korea have been hard on the crypto industry recently in a bid to eliminate fraud and other related activities that expose investors to danger.
Should South Korea be Like the U.S?
South Korea is one of the countries that have tried to come up with regulations to guide the crypto industry, thus allowing it to grow. However with such fraudulent activities, the country may need to tighten its regulatory ropes to protect investors.
The U.S is already notorious for lack of clear regulatory guidelines and strictness on crypto and related startups. This has made many startups to flee the country. South Korea may not go to that extent, but definitely needs to step up its regulatory game.
The country already has Do Kwon to deal with and is now dealing with Coinone. All these put together can give not just the crypto industry but the whole country a bad name in the sight of the international community. There’s currently no information on when the trial will hold, but hopefully the two executives will be tried and if convicted will be punished appropriately to serve as a deterrent to others who may be thinking of or even involved in such acts.
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