Coinbit shutdown by South Korea authorities

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Quote from: The Sceptical Chymist on August 27, 2020, 05:05:41 PM

I'm curious as to who the whistleblower was in this case, as I'm pretty sure the South Korean authorities didn't just stumble upon this on their own. Rival exchange? Pissed off traders?

Seems like it was a tip from inside the company, probably someone who understood that it's better to come clean and avoid a prison sentence if all goes south..
One other thing is the sum involved, 8 million $, really low for a top exchange, what's that, not even 1000BTC ?

Quote from: bbc.reporter on August 28, 2020, 10:37:13 PM

Quote from: gentlemand on August 28, 2020, 03:57:26 AM

Everry step of the way the south Korean government has been way behind and appeared to be laying there farting in its own juices while people ran rings around it.

Incompetence by the government? Agreed! Government has always been inefficient, incompetent and corrupt.

Don't know really about the SK government in internal affairs but in the virus crisis they acted faster and better than almost anyone on this planet, maybe when it comes to crypto they are taking their sweet time but overall I'm considering them one of the most efficient out there. Besides, that's not even the government business it's directly anti fraud police work.

Quote from: hugeblack on August 29, 2020, 10:12:55 AM

What does this have to do with freezing actual account holders?

Let's assume there books don't match, poeple have deposited 1000BTC and there are only 100BTC in the wallets.
Insiders would take advantage of the news and some clients will get all the money out and some will be left with zero, lawsuits will fly like fireworks on 4th of July against the police.

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Quote from: hugeblack on August 29, 2020, 10:12:55 AM

What does this have to do with freezing actual account holders?

Perhaps they have to initially freeze the account holders money so that they can do a full investigation?

Quote from: hugeblack on August 29, 2020, 10:12:55 AM

There is no control over the trading platforms, there is nothing to prevent them from faking trading volumes and thus attracting more clients. It happens on a lot of platforms and it happens in some banks even though there are a lot of regulatory restrictions.
If South Korean law provides for some regulations, then fines may be imposed on this platform.

True, but South Korea has been very strict, very comprehensive that it is hard to open an exchange because of its tougher cryptocurrency law. So it's a ballsy move from the owner to pull this move and think that they are not going to be caught and received a heavy fines, worst jail time for this.

hugeblack

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What does this have to do with freezing actual account holders?
There is no control over the trading platforms, there is nothing to prevent them from faking trading volumes and thus attracting more clients. It happens on a lot of platforms and it happens in some banks even though there are a lot of regulatory restrictions.
If South Korean law provides for some regulations, then fines may be imposed on this platform.

bbc.reporter

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Quote from: gentlemand on August 28, 2020, 03:57:26 AM

Incompetence in the sense of allowing it to flourish.

Everry step of the way the south Korean government has been way behind and appeared to be laying there farting in its own juices while people ran rings around it.

Incompetence by the government? Agreed! Government has always been inefficient, incompetent and corrupt. Why do you think they are always increasing tax collection every year hehehe?

In any case, the scarier move to occur after this is when the inefficient, incompetent and corrupt government overregulates the cryptospace.

Also, I speculate that the exchanges that do wash trades are doing it for money laudering purposes. There might be some cryptocoin exchanges around the world that are part of one global money laundering ring. I have said this many times already.

Yogee

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They still managed to manipulate despite the strict regulations in the country. How often do these "watchdogs" check these exchanges? Annually?

I read in another thread that an accounting firm refused to work with them after seeing their books https://www.coindesk.com/south-korea-crypto-exchange-coinbit-seized-allegations-fraud-wash-trading That may have triggered the investigation which eventually led to the exchange shutdown.

Quote from: Baofeng on August 28, 2020, 06:47:12 PM

......
the reference that I put is in Japanese

Korean

Baofeng

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Quote from: gentlemand on August 27, 2020, 04:56:22 PM

What is it with the South Korean market and incompetence? You'd think they would've got rolling with impressive techno sheen but it seems to have been a chaotic improvisation from the start and it's continuing.

I'll bet the majority of places outside the top bunch are doing the exact same thing, and the top bunch did it themselves too in the early days.

Perhaps they learn for their Chinese counterpart exchanges,

. But it's quite surprising though coming from South Korea wherein there are tougher regulations.

@logfiles - perhaps it's lost in translation, the reference that I put is in Japanese and I translated it to English using Google Translate.

logfiles

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Good riddance, one less trade volume faking exchnge. How I wish more authorities tighten the grip on volume faking exchanges.

Quote from: Baofeng on August 27, 2020, 03:19:23 PM

with an average number of visitors of 2.52,000 in the last three months (May-July).

I don't understand the number well, is it 252,000?

gentlemand

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Incompetence in the sense of allowing it to flourish.

Everry step of the way the south Korean government has been way behind and appeared to be laying there farting in its own juices while people ran rings around it.

bbc.reporter

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Quote from: gentlemand on August 27, 2020, 04:56:22 PM

What is it with the South Korean market and incompetence? You'd think they would've got rolling with impressive techno sheen but it seems to have been a chaotic improvisation from the start and it's continuing.

I'll bet the majority of places outside the top bunch are doing the exact same thing, and the top bunch did it themselves too in the early days.

This is not incompetence, this is scamming people. Chinese exchanges and many others from different countries are also known to be doing something similar. It is not breaking news, this is old news.

According to Bitwise's report, only 10 exchanges have real volume and the real volume is only 4.5% of the reported volume. Go to page 60.

https://www.sec.gov/comments/sr-nysearca-2019-01/srnysearca201901-5164833-183434.pdf

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Quote from: The Sceptical Chymist on August 27, 2020, 05:05:41 PM

Quote from: Baofeng on August 27, 2020, 03:19:23 PM

It didn't mention if the funds of actual account holders are going to be freeze.

Of course it didn't mention any important details like that--this is journalism we're talking about, where reading an article leaves you with more questions than information.

I don't know how the South Korean law enforcement operates, but I'd have to assume that they're not going to just steal funds from legitimate Coinbit customers. You do have to wonder how long it'll take for them to unfreeze those funds, though. That really sucks that those legit account holders have to suffer because the exchange they were using was pulling all of this shady shit (allegedly).

They would pull off that thing if they do tend to steal or hold up those funds yet users will really be looking for those funds and its just unethical if it would end up like that.
Its not something new for these faking volume issues and we do know that this had been done by most exchangers in the market as of today but this one (Coinbit) did
really make it too obvious for them to get busted.
For its users then theres nothing they can do but to wait up for it to be settled.

The Sceptical Chymist

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Quote from: Baofeng on August 27, 2020, 03:19:23 PM

It didn't mention if the funds of actual account holders are going to be freeze.

Of course it didn't mention any important details like that--this is journalism we're talking about, where reading an article leaves you with more questions than information.

I don't know how the South Korean law enforcement operates, but I'd have to assume that they're not going to just steal funds from legitimate Coinbit customers. You do have to wonder how long it'll take for them to unfreeze those funds, though. That really sucks that those legit account holders have to suffer because the exchange they were using was pulling all of this shady shit (allegedly).

Quote from: gentlemand on August 27, 2020, 04:56:22 PM

I'll bet the majority of places outside the top bunch are doing the exact same thing, and the top bunch did it themselves too in the early days.

Lol, no doubt. And hell, I didn't even realize there were at least 178 crypto exchanges in existence (I don't pay attention to CMC). That seems like a very high number given the fact that most people don't seem to own any cryptocurrency.

I'm curious as to who the whistleblower was in this case, as I'm pretty sure the South Korean authorities didn't just stumble upon this on their own. Rival exchange? Pissed off traders?

gentlemand

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What is it with the South Korean market and incompetence? You'd think they would've got rolling with impressive techno sheen but it seems to have been a chaotic improvisation from the start and it's continuing.

I'll bet the majority of places outside the top bunch are doing the exact same thing, and the top bunch did it themselves too in the early days.

Baofeng

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Coinbit, the third largest South Korean exchanges, has been shutdown following allegations that it is faking trade volumes and manipulation.

Quote

On the 26th, the police seized Coinbit, a large domestic cryptocurrency exchange, on suspicion of fraud. Coinbit is the third largest exchange in Korea after Bithumb (411,4800) and Upbit (3667,000) with an average number of visitors of 2.52,000 in the last three months (May-July).

The Seoul Metropolitan Police Agency's Metropolitan Investigation Department confiscated and searched several places, including the headquarters office of Coinbit in Gangnam-gu, Seoul. The police investigated the charges of inflating the trading volume and manipulating the market price by'bicycle transaction' (an act of buying and selling coins between accounts inside the exchange) through multiple'ghost accounts' by Coinbit's beneficial owner, Chairman Choi Mo (48) and the management team.

http://www.seoul.co.kr/news/newsView.php?id=20200826500071

It didn't mention if the funds of actual account holders are going to be freeze. But I'm sure that once the investigation is done, it will be refunded. Ranked #178 in cmc with a decent trading volumes of 16,807 BTC.

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