Coinone’s Executives Suspected Of Taking Bribes To List At Least 46 Tokens

Key Points:

• Executives of the crypto exchange Coinone were discovered to have listed at least 46 tokens in exchange for money between December 2019 and November of last year.
• This amount equates to one out of every four coins listed on the exchange as of March, when the first prosecution in the Coinone listing corruption case was brought.

According to JoongAng Ilbo, as of March 1, there were at least 46 kinds of tokens suspected of receiving bribes from the executives and personnel of the South Korean crypto exchange Coinone, accounting for one-quarter of all listed currencies on the market.

The Financial Investigation Division 1 of the Seoul Southern District Prosecutor’s Office examined cooperation and misconduct between exchange officials and brokers throughout the Coinone listing process. In March and April, ex-Coinone Chief Sales Officer (CGO) Jeon Mo-ssi was probed three times, and listing team head Kim, broker aunt, and Hwang were all charged. Coinone executives and workers got a total of 2.98 billion won from brokers in return for coin listing, including about 1.94 billion won for Chun and approximately 1.04 billion won for Kim.

According to an indictment received via Rep. Cho Su-jin, a member of the National Assembly Law and Judiciary Committee, Mr. Jeon and Mr. Kim, who were in charge of listing Coinone, were Mr. Ko, who had been operating as a broker since the second half of 2019. Mr. Hwang, a self-proclaimed ‘agent,’ also assisted Mr. Kim in analyzing the credibility of the listing application foundation and doing due diligence.

Jeon got Tether (USDT) and Bitcoin worth 220 million won from Koh 13 times between March 2020 and November 2020 and 120 million won in cash 12 times between April 2020 and November 2020. Received in the shopping bag. Last year, Hwang got Tether worth 330 million won and Ripple (XRP) tokens worth 1.27 billion won on 16 occasions.

Mr. Kim got 150 million won in bank account transfers and cash shopping bags from Koh from December 2019 to March 2021 and 460 million won in payments from April 2020 to May 2021. have been relocated, Hwang got 430 million won worth of Tether in his electronic wallet eight times between February 2021 and April last year. The foundation’s pre-issued sum of roughly 40 million won, which permitted the listing, was redirected to his father’s electronic wallet between December 2020 and February 2021.

Coinone executives and staff members had the foundation, which sought to float a new currency and sign a market maker (MM) contract with a particular MM business via brokers throughout this procedure.

It was intended to keep transaction costs from falling owing to a lack of trading activity once new coins were launched, however, these companies were illegal MM firms that artificially increased trading volume and prices via cross-trading.

Yet, when negotiating the MM contract, Jeon informed Coinone CEO Cha Myung-hun that if the listing application foundation inks a contract with a liquidity supply (LP) provider, the deposit would be reduced. That is not a concern since it just adds liquidity providers and exempts the foundation that contracts with these firms from the listing deposit.

In reality, the prosecution is looking into the Coin Foundation, which Jeon set up for MM enterprises like Pika, using fraud charges. The MM conduct was also termed as “illegal market manipulation” in this case.

“There has not yet been a case in which illegal MM activities in the coin market have been prosecuted for fraud against ordinary investors,” a prosecution official stated.

In the indictment, the prosecution classified MM activities via cross-trading as criminal market manipulation and identified listing on the virtual asset exchange, regular liquidity supply (LP), and price manipulation by coin MM operators as fundamental facts.

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Harold

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