Cryptocurrency executives arrested under charges of fraud and embezzlement

Park Sae-jin Reporter Posted : 2018-04-05 16:40 Updated : 2018-04-05 16:40
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SEOUL -- Four executives of two cryptocurrency exchanges have been arrested on charges of fraud and embezzlement in a probe into illegal activities in South Korea's nascent virtual currency market, prosecutors said Thursday.

This marked the first arrest of cryptocurrency exchange executives since prosecutors launched a probe into the operators of cryptocurrency exchanges including Coinnest last month on complaints from financial authorities.

The four arrested included Coinnest's CEO identified by his surname Kim, who is suspected of transferring billions of won from business bank accounts to personal accounts. The executives are suspected of deliberately misguiding ordinary investors to collect money from them.

Prosecutors vowed to look into more cryptocurrency exchanges as financial regulators allegedly discovered serious cases of misconduct in an investigation into cryptocurrency-related transaction records at banks.

Regulators have called for strong steps to prevent the "serious" side effects of irrational and excessive speculative investments. A customer identification system was imposed on January 30, allowing only real-name accounts used for deposits and withdrawals in cryptocurrency trading.