HTS Officials arrested for Embezzlement of User Funds

The president and executives of South Korean HTS were arrested for illegally reallocating the firm’s holdings in bitcoin and ether to their personal accounts
16 May 2018   936

The police of Southern Seoul and local financial authorities headed by inspector Jeong Dae-seong aquired an arrest ordert for 4 executives at HTS including the main developer of the HTS trading platform and operator of the exchange on May 14. As declared in the prosecutor’s office of Seoul, HTS president Shin together with the three representatives of the firm replaced user funds kept in the the company`s cryptocurrency wallet  to external bank accounts, mainly stealing cryptocurrencies from the company’s customers.

Formerly the third largest crypto exchange in South Korea, Coinnest was temporarily closed by the local officials after its executives were arrested in March 2018 for stealing user funds. Then it was reported that millions of dollars in user funds were transmitted to the personal accounts of the firm’s executives.

The prosecutor’s office of Seoul revealed that the local police initially aimed to raid the headquarters of HTS together with Coinnest, but then decided not to in order to concentrate on the investigation on Coinnest, as the government received solid evidence of malpractice.

HTS is not the first exchange in South Korea to be checked and officially investigated by the local police and investigators from the Korea Financial Intelligence Unit (KIU), following Coinnest and Upbit.

BIS to Issue Research on Bitcoin Problems

Researcher from the Bank of International Settlements believes BTC should abadon PoW
22 January 2019   82

Researchers from the Bank for International Settlements published a report in which they stated that only by abandoning the Proof-of-Work mechanism of consensus, Bitcoin could get rid of its current and future problems.

According to them, in the future, when the size of the rewards for mining drops to zero, transaction processing fees alone will not be enough to justify the miners' activities. Consequently, the Bitcoin network will become so slow that it will be impossible to use it, the authors argue.

Simple calculations suggest that once block rewards are zero, it could take months before a Bitcoin payment is final, unless new technologies are deployed to speed up payment finality. 

Raphael Auer

Principal Economist, BIS

The BIS admits that second-level solutions such as the Lightning Network can ease the task, but “only fundamental remedy would be to depart from proof-of-work.” According to the report, the transition to alternative consensus mechanisms “require some form of social coordination or institutionalisation”.

The Bank for International Settlements contributes to the cooperation of 60 central banks from various countries of the world, which account for 95% of global GDP.

Earlier this month, the agency disclosed statistics on central bank initiatives in the field of state digital currencies. According to him, about 70% of central banks conduct research related to the issuance of national digital currencies, but plans for their implementation and the perception of the issue vary considerably in different countries