Raids at offices of major South Korean Bitcoin exchange

One of South Korea’s leading cryptocurrency exchanges, Coinbit, is suspected of inflating trading volumes by 99%. Through a fraudulent scheme, the company could have earned more than 100 billion won ($85 million), according to the local publication Seoul News.

In the morning of August 26, Seoul police raided the company’s offices. The exchange’s staff, led by owner Choe Mo, are suspected of fraud involving the strategy отмывочного трейдинга.

According to police, Coinbit’s management created two wallets on the exchange. The first was used to conduct trades with fake accounts to create the appearance of high volumes.

The second address was reportedly used for dealings with obscure coins and ICO tokens. By controlling their circulation, the exchange’s leadership inflated prices and sold these assets to retail investors, police say.

The police were also concerned by the company’s accounting practices.

“The fact that Coinbit refused to undergo external audits points to non-standard business practices. Their accounting cannot be trusted,” said a tax accountant who wished to remain anonymous to reporters.

Last week, researchers called popular cryptocurrency exchanges with signs of inflated trading volumes.

Earlier, Canada’s largest bitcoin exchange Coinsquare was accused of falsifying 90% of its trading volumes.

Which exchanges deserve trust according to Coin Metrics’ methodology, read via the link.

Which bitcoin exchanges truly deserve trust — a test of resilience by Coin Metrics

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