Hello Markets Adds Bitcoin Features to Tap Into Asian Markets

By Ray Crawford·5 April 2018·1 min read

Key Points

South Korean authorities took four executives from two cryptocurrency exchanges into custody on suspicion of stealing customer funds worth billions of won.
Kim Ik-hwan, who runs Coinnest—the country's

South Korean authorities took four executives from two cryptocurrency exchanges into custody on suspicion of stealing customer funds worth billions of won. Kim Ik-hwan, who runs Coinnest—the country's fifth largest digital asset platform—faces embezzlement charges along with the others. The Seoul Southern District Prosecutors' Office says the men diverted customer funds into their own accounts.

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This marks the first time prosecutors have detained a crypto exchange executive in South Korea. The office had conducted raids on three exchanges in mid-March, when investigators suspected misappropriation of funds. At that point, authorities did not clarify whether the transfers constituted embezzlement.

Prosecutors now must decide whether to issue arrest warrants for the four men or release them pending investigation. They plan to examine other exchanges for similar activity.

Authorities have cracked down on cryptocurrency crime in recent months. The Korea Customs Service reported in February that traders had illegally exchanged roughly $600 million in digital currencies within the country. Last September, the government banned initial coin offerings over worries about money laundering and tax evasion.

The government has not enforced that ban in practice. Recent reports suggest officials are considering new regulations that would allow ICO trading for domestic investors. South Korea is also discussing a licensing system for exchanges modeled on New York's BitLicense.

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