April 06, 2018 13:13
Four CEOs and senior executives of two cryptocurrency exchanges have been arrested on charges of embezzling investors' money, prosecutors in Seoul said Thursday.
This is the first arrest since the Bitcoin frenzy threw up a raft of scandals involving cryptocurrency exchanges. The suspects include Kim Il-hwan, co-founder of No. 5 CoinNest.
According to prosecutors, the executives have been charged with funneling money from investors' accounts into their own.
Cryptocurrency exchanges only connect owners with buyers and skim off a hefty fee, but prosecutors believe not all trades were executed in this way and have charged the suspects with fraud as well.
Earlier, the Financial Supervisory Service's Financial Intelligence Unit notified law enforcement that a probe revealed suspicious activities at CoinNest.
A prosecution official said, "We are also investigating other cryptocurrency exchanges where similar financial records have been found."
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