Arrest Warrants Issued to Employees of South Korean Crypto Exchange

Arrest warrants have reportedly been issued to three employees of a small South Korean cryptocurrency exchange, including its representative director. The three are “suspected [of] fraud and embezzlement,” according to local media.

Arrest Warrants for Crypto Exchange’s Employees

Arrest Warrants Issued to Employees of South Korean Crypto ExchangeOn Monday, local media reported that arrest warrants have been issued to employees of a South Korean cryptocurrency exchange. “Three of the company’s executives, who operate virtual currency trading site HTS Coin, were arrested for [suspicion of] fraud and embezzlement,” Money Today wrote.

The Financial Investigation Division 2 of the South Korean Prosecutor’s Office “demanded a warrant for three employees, including…[the] CEO of HTS Coin,” Token Post detailed, adding that the other two employees are a program developer and a system operations manager.

The publication explained that the three are also suspected of “deceiving investors, [by] pretending to” have cryptocurrencies “on the computer side without having real cryptocurrencies.”

“The prosecution believes that they have falsified” records and “used the money in the customer’s account as a personal account of the exchange,” Joongang added.

Responding to media reports, the exchange posted a notice Monday on its website maintaining that “All services except Korean won deposits, such as Korean won withdrawals, coin deposits, and coin withdrawals, are operating normally.

On-Going Investigations

According to Asiae, an “interrogation of the suspects before the arrest was held in the southern part of Seoul on the morning of the same day,” adding that in March the “prosecutors searched three virtual currency exchanges including Coinnest, and it was reported that HTS Coin was included in the seizure investigation at that time.”

Arrest Warrants Issued to Employees of South Korean Crypto ExchangeJoongang confirmed this report, stating that “prosecutors searched three virtual currency exchanges including HTS Coin, Coinnest, and Komid last March.”

The news outlet further conveyed that “the prosecution has been investigating the illegal acts of virtual currency trading sites” in collaboration with the Korea Financial Intelligence Unit (FIU) and the Financial Supervisory Service (FSS) under the supervision of the Financial Services Commission (FSC). In March, “the investigation resulted in the arrest of four executives including CEO Kim Ik-hwan [of] Coinnest…Kim was handed over to trial last month.”