Korean CoinNest exchange CEO detained for fraud

South Korean media reported today that CEO of CoinNest (South Korean-based cryptocurrency exchange) has been  imprisoned for embezzlement and swindle
05 April 2018   567

According to the information by South Korea’s Seoul District Prosecutors’ Office, this week (on Monday) it had incarcerated Kim Il-hwan, co-founder of CoinNest. This is the first time a member of a Korean cryptocurrency exchange has been incarcerated. Prosecutors consider that the CoinNest administrative has redirected customer funds to the company executives`benefits.

The prosecution’s order of arrest for Kim was moved by The Seoul Metropolitan Governmental Financial Investigation Division scan of three virtual exchanges launching on December 12th, 2017. CoinNest was included in this pursuit.

The prosecution was also announced to be investigating another virtual cryptocurrency exchange that invested means collected from ordinary people with a help of a deceptive scheme. Adding to the curious disposition of the arrest, the Korea Blockchain Association said, “CoinNest already resigned before the investigation.”

South Korean government is supposed to pay more attention to transparency in cryptocurrency trading within the framework of the current law, and definitely obstruct  illegal and fraudulent activities, but it stopped short of banning trading.

The authorities have made indefinite and sometimes contradictory statements about the possible ways of regulation cryptocurrency exchanges. Though their positions have been clarified a little later at formal press events, news hearsays and the language/cultural barrier have been accused for causing different asset prices to both soar and tank in recent months.

The country has taken a key position for digital asset trading in the past year as volumes shifted away from China, regulation in Japan constricted, and unclear local laws promoted a degree of anonymous and unregulated activity.

Coinbase to Issue New Statement

As reported, company says it was wrong about SEC approval of acquisitions of Keystone Capital Corp., Venovate Marketplace Inc. and Digital Wealth LLC
18 July 2018   153

Vice President of Communications of Coinbase Rachel Horwitz denied the information that the company received approval from the Securities and Exchange Commission of the United States for a deal to buy brokerage companies. This is reported by Bloomberg.

It is not correct to say that the SEC and FINRA approved Coinbase’s purchase of Keystone because SEC was not involved in the approval process. The SEC’s approval is not required for the change of control application. Coinbase has discussed aspects of its proposed operations, including the acquisition of the Keystone Entity, on an informal basis with several members of SEC staff.
 

Rachel Horwitz

Vice President of Communications, Coinbase

On Monday, a spokesman for Coinbase said that the company received permission from the SEC and the Agency for Regulation of Financial Institutions (FINRA) to purchase Keystone Capital Corp., Venovate Marketplace Inc. and Digital Wealth LLC.

However, despite the refutation from Rachel Horwitz, Coinbase still intends to obtain a license to carry out brokerage activities.