South Korea’s renowned cryptocurrency exchange, Coinone, is embroiled in a high-profile bribery scandal, highlighting the ongoing challenges in the rapidly growing crypto sector. Two former employees of Coinone, identified as Jeon and Kim, have been convicted for accepting bribes to facilitate listing certain cryptocurrencies on the exchange platform, a practice ongoing since 2020.
Jeon, 41, the ex-head of cryptocurrency listing at Coinone, has been sentenced to four years in prison and is mandated to return 1.93 billion Korean won (US$1.43 million) in illicit earnings. He was arrested on March 22, 2023, following the discovery of substantial evidence pointing to bribery and breach of trust. His colleague, Kim, 31, received a 42-month jail term and an 883-million-won (about $654-thousand) fine for his illicit activities.
Moreover, brokers Koh and Hwang have also been convicted and sentenced for orchestrating the listing bribery. The tokens in question were allegedly associated with companies paid to artificially inflate the value of cryptocurrencies, including regional cryptocurrencies like Pica Coin and Puriever.
In his ruling, Judge Kim Jung-gi of the Seoul Southern District Court characterized the crime as a complex collusion involving multiple conspirators, including crypto exchange listing staff, brokers, token issuers, and market-making companies. They aimed to share profits from issuing new coins and manipulating market prices.
South Korea stands as one of the most significant cryptocurrency marketplaces globally, with its local market valued at 19 trillion won (US$14.1 billion) by the Bank of Korea at the end of the previous year. However, this incident underscores the persistent issues of transparency and ethical practices within the industry.
Hwang Suk-jin, a Seoul-based specialist in information security and financial crime, mentioned in a recent interview that despite some exchanges maintaining transparency in listing tokens, many exchange personnel are routinely involved in such unethical practices.
Additionally, the local news agency, Newsis, reported that this case is a glaring example of the internal and external collisions happening within the crypto industry to manipulate market prices and share the resulting profits. The convicted individuals were part of a larger network that included brokers and market-making companies, all working in tandem to benefit from the issuance of new coins and market manipulation.
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