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South Korean law enforcement officials reportedly arrested a former employee of the local crypto exchange Coinone for allegedly accepting $1.47 million in bribes to list particular cryptocurrencies on the platform in 2020. The prosecutors are also investigating other local crypto exchanges, including Bithumb and its CEO, Lee Sang-jun.
S. Korean Prosecutors Also Investigating Bithumb CEO
According to the Seoul Southern District Prosecutors’ Office, a former employee of S. Korean crypto exchange Coinone was arrested on Tuesday on allegations of accepting a bribe to list specific crypto tokens on the platform in 2020. The employee reportedly received 1.9 billion Korean won ($1.47 million) for listing the cryptocurrencies on Coinone.
Meanwhile, the prosecutors in Seoul are also investigating Lee Sang-jun, CEO of Bithumb, the second-biggest crypto bourse in the country. Lee is facing similar allegations, though the prosecutor’s office has yet to request an arrest warrant.
Another Potential Scandal in S. Korea’s Crypto Industry
The report about a potential bribery scandal marks another stain on the reputation of the S. Korean crypto industry, which has been criticized for alleged irregularities in the past few years. The case, which raised concerns about the integrity of crypto listings on the country’s local exchanges, could have significant implications for its digital asset industry.
Authorities in South Korea have been ramping up efforts to regulate the fast-growing crypto sector, which has been struggling with a myriad of hacks, frauds, tax evasion issues, and, most importantly – the contagious collapse of Terraform Labs.
Earlier this year, South Korea’s Financial Supervisory Service submitted a proposal for a unified system for mandatory information disclosure from crypto exchanges and digital token issuers. The proposal aims to protect investors from fraud and scandals such as the one related to the WEMIX token last year.
But S. Korea’s efforts to regulate the digital asset industry started several years ago. In 2017, the country’s financial watchdog imposed a ban on initial coin offerings (ICOs) and implemented strict regulations on crypto trading to prevent potential money laundering and other illicit activities.
Should S. Korea regulate cryptocurrencies even more to prevent further fraud? Let us know in the comments below.