The leaders of two cryptocurrency exchanges in South Korea arrested for theft of client funds

The leaders of two cryptocurrency exchanges in South Korea arrested for theft of client funds

Prosecutors in South Korea have detained the managers of two cryptocurrency exchanges for alleged embezzlement and fraud. The event takes place on the background of the attempts of regulators to set rules for violent cryptocurrency market.

Two of the four leaders of the head of cryptocurrency exchanges. One of them identified as Kim IK-hwan, Executive Director in the Seoul stock exchange Coinnest, the world’s fifth-largest exchange. The names of other suspects were not disclosed.

In a statement to Reuters, the official representative of the Prosecutor’s office said:

They were interrogated in connection with the theft of billions of won (tens of millions of dollars) from the accounts of their clients. The defendants simply transferred funds to their own accounts.

In a statement on its web site representatives Coinnest apologised to customers and confirmed the dismissal of the suspects, stressing that the work on the return of assets to clients. The exchange also said about hiring professionals from the fields of “Finance, security and technology” shaping the new professional management team, which “focuses on the protection of customer assets and create a healthy trading environment”.

The arrests came after a series of raids Prosecutor’s office for the southern district of Seoul on three cryptocurrency exchanges, including Coinnest. The result of the raids, law enforcement seized some documents, mobile phones, computer hard drives and accounting reports.

After the arrest of four detained leaders will be followed by further investigation, including the activities of other cryptocurrency exchanges.

This is the first case of detention of representatives of the cryptocurrency business in South Korea. The country is in third place in the world in terms of trading digital currencies.

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