Two top leaders of Komid, a South Korean cryptocurrency exchange, were purportedly sentenced to serve jail time for faking exchange volumes, as per the report of Korean crypto media outlet Blockinpress on Jan. 18.
Choi, the CEO of the exchange, received a jail sentence of three years, while another company leader with an unspecified role was allegedly sentenced to two-year incarceration for misconduct, fraud, and misappropriation, as per the published article.
The charges purportedly outline a scheme where the exchange faked 5 million transactions in order to inflate the volume, which apparently earned them a fortune of $45 million. It is also alleged that the company used a bot to automatically generate large orders. This was allegedly schemed to attract new users to their platform. The article quotes the judge mentioning that Choi has committed fraud for an immeasurable number of victims for a long period of time. Additionally, the judge holds the financial authorities accountable for failing to keep track of the industry in a better manner.
Notably, the largest cryptocurrency and digital asset exchange of South Kore, Upbit denied accusations it had orchestrated its order book after regulators indicted three of its staff members, as several media houses reported in the month of December last year.
Citing reports from the Seoul District Prosecutors Office, The Korea Times mentioned at the time that two senior executives from Upbit’s developer Dunamu and one Upbit employee have been indicted as part of an investigation into the proceedings. However, they also clarified that they are not detained.
It is to be noted that South Korea-based cryptocurrency and digital asset exchange Bithumb also denied allegations of faking trade volume, earlier in the same month.