By George Ward
According to local authorities, an unnamed former employee of South Korean crypto exchange Coinone has been arrested over allegations of accepting bribes before listing specific cryptocurrencies on the platform.
As an official of Coinone, this person was responsible for creating and managing the exchange’s crypto listings and used his position for exploitative means. According to the allegation, he has received more than $1.47 million in bribe payments.
Meanwhile, the investigation is ongoing, and although no names have been released yet, the bribery allegations have sparked a wave of concern throughout the local crypto industry. The prosecutors are also looking into other regional crypto exchanges, particularly Bithumb and its CEO, Lee Sang-jun.
South Korean Prosecutors Are Also Investigating Bithumb And Its CEO
The Seoul Southern District Prosecutors’ Office has reported that a former employee of the South Korean crypto exchange Coinone was taken into custody earlier this week. The arrest was due to allegations of taking a bribe to list specific crypto tokens on the exchange in 2020.
The speculation is that the individual received 1.9B Korean Won (~$1.47M) for listing the cryptocurrencies on Coinone. Meanwhile, the prosecutors in Seoul are looking into launching an investigation against Lee Sang-jun, CEO of the second-largest crypto exchange in the nation, Bithumb.
He is accused of similar offenses, yet the prosecutor’s office has requested no arrest warrant.
South Korean Crypto Industry Sullied By Latest Bribery Scandal
The latest potential bribery scandal reported has sullied the image of the South Korean cryptocurrency industry, which has been under the microscope for its supposed improprieties in the preceding years. This episode, which has cast doubt on the legitimacy of digital asset listings on exchanges in the country, could have far-reaching implications.
As South Korea moves to institute stricter oversight of its fast-growing crypto industry, this sector struggles with hacks, scams, taxation problems, and Terraform Labs’ downfall. This year, South Korea’s Financial Supervisory Service suggested establishing a mandatory disclosure system for cryptocurrency exchanges and digital token issuers to safeguard investors from scams such as what happened with the WEMIX token in the past.
This push to control the digital asset sector began a few years ago when the country’s financial watchdog implemented a prohibition on initial coin offerings (ICOs). It also applied stringent rules on crypto trading to avert the possible laundering of funds and other unlawful activities.
The latest arrest incident has raised concerns about the security and transparency of cryptocurrency exchanges, often criticized for their lack of transparency. Meanwhile, this is not the first time a crypto exchange employee has been arrested for taking bribes.
In 2018, the CEO of another South Korean exchange, Upbit, was also arrested on fraud charges.