South Korean 3rd largest cryptocurrency exchange, Coinbit, has reportedly been seized by police over allegations that it faked most of its trading volume.
In line with a recent report from native reporting media, Seoul, the local police raided & confiscated the company’s Gangnam headquarters along with other premises.
Accused of fraud, the firm’s owner, Choi Mo, and other managers are said to possess artificially inflated volumes on the exchange by using “ghost” accounts to form fake trades – a practice referred to as wash trading.
Within the report, Seoul added that it had been informed by insiders of corruption at Coinbit several months ago that up to 99% of trading volume was “manipulated” on the platform.
Police allege wash trading at Coinbit had produced over 100 Bln won [$84 Mln] in faked income.
The report also added that it had postponed reporting its findings until the raids at the request of the Investigation Department of the Seoul Metropolitan Government.
An accounting firm had reportedly refused to figure with the firm after viewing its books.
Seoul said it had seen the books and around 99% of recorded trades couldn’t seem to be related to deposits or withdrawals.