South Korea is one of the places where cryptocurrency is booming. Even so, there are still a few risks associated with the people providing access to this new form of money. Users of the CoinNest exchange should be quite concerned right now, as the company’s CEO was arrested on suspicion of embezzlement and fraud.
CoinNest CEO Runs Into Trouble
The alleged connection between cryptocurrency and money laundering still needs solid evidence before it can be proven. Even though various regulators around the world tend to claim Bitcoin and altcoins are mainly used for laundering money and fraud, there has been very little evidence to make this claim stick. In the case of CoinNest CEO Kim Il-Hwan, that situation may be a bit different.
Police officials arrested the executive earlier this week. It is believed that Kim and a few of his colleagues siphoned funds out of customer accounts and moved them into their own. This type of activity is illegal in every country, and it was only a matter of time until the truth came to light.
With South Korean officials taking a very close look at cryptocurrency exchanges these days, any irregularities will come to light fairly quickly. Even though most people may assume cryptocurrency is anonymous, that is usually not the case for the top coins right now. Bitcoin, for example, lacks both privacy and anonymity features, as its blockchain is an open book full of digital breadcrumbs which anyone can follow.
It is a bit unclear how the investigators fingered the CoinNest exchange for illicit activity. Reports indicate this is not the only trading platform currently under investigation. Another undisclosed trading platform is also suspected of criminal activity, although no further details have been provided at this time. With three other companies having been raided in March, it is evident there may be a lot of wrongdoings waiting to be uncovered.
How things will pan out for CoinNest and its CEO remains to be determined. With the exchange’s boss in police custody, it is unclear if the exchange can resume its services. Moreover, we may very well see a lot of people move their funds out of CoinNest, or at least try to do so. Depending on how much money was siphoned from customer accounts, some discrepancies will arise at some point.
Unfortunately, it may not necessarily be the last time we will witness incidents like these unfold in the world of cryptocurrency. Greed often brings out the worst in people. Additionally, most people assume stealing cryptocurrencies will not lead to any legal repercussions. The reality is very different, though, and criminals will be brought to justice in one way or another. All of this only further highlights the need for trading platforms without middlemen.