The Seoul Metropolitan Police Agency has reportedly seized local crypto exchange Coinbit for allegedly inflating trading volumes.
South Korea’s oldest newspaper, the Seoul Shinmun, reported the news on Wednesday, saying that Coinbit’s offices have been raided for the alleged fraud. The exchange is accused of using multiple “ghost accounts” to inflate trading volumes.
About 99% of Coinbit’s trading volume is said to have been manipulated in recent months, which resulted in “unfair profits” of at least 100 billion won (about $84 million) for the exchange and its team. Coinbit’s accounting practices are also poor, per the report.
Coinbit has now reportedly halted operations amid an ongoing investigation by the police.
In light of the Coinbit situation, Doo Wan Nam, MakerDAO’s business development associate in the Asia-Pacific region, suggested users to trade via decentralized exchanges.
South Korean crypto exchanges and firms are set to face stricter rules from next year as the country recently amended a law that will officially bring cryptocurrencies under its legal system.