A former executive of the prominent South Korean cryptocurrency exchange Coinone, known publicly as Mr. Jeon, has conceded to charges of accepting bribes amounting to nearly 2 billion won ($1.51 million) for the exclusive listing of certain cryptocurrencies on the platform.
This troubling revelation, first reported by local news agency Yonhap, has shaken the cryptocurrency sphere, casting doubt over the integrity of other native cryptocurrency exchanges and triggering a nationwide investigation by Korean regulators.
The charges: A deep dive into the Coinone case
Jeon, who formerly directed Coinone’s listing process, was indicted for providing exclusive listing to dubious cryptocurrencies, including “Furiever Coin.” It is important to know that this asset has since been linked to severe criminal investigations involving kidnapping and murder in Seoul’s affluent Gangnam district.
An associate, Mr. Ko, orchestrated the alleged bribe and facilitated the problematic listings, contributing to the scandal that now threatens to tarnish Coinone’s reputation.
Further complicating matters involves another Coinone listing team member, whose identity remains concealed. While they have been implicated in the accusations, their legal representatives have asserted the need for additional time to review the evidence before responding officially to the charges. The next court hearing is set for June 15.
The fallout: A ripple effect on South Korea’s cryptocurrency sphere
The implications of this scandal extend beyond Coinone. It has been suggested that a staggering 45 cryptocurrencies, constituting about 25% of Coinone-listed tokens, might be involved in this illicit scheme. Given the size of South Korea’s cryptocurrency market, valued at approximately 19 trillion won ($19.3 billion), the fallout could significantly impact investor sentiment.
In the wake of the Coinone scandal, Korean legal practitioners are combing through other native cryptocurrency exchanges to uncover additional unlawful activities. This cautionary tale emphasizes the need for increased vigilance and regulation in a market experiencing rapid growth and public attention.
This incident and the recent collapse of the algorithmic stablecoin LUNA alerted South Korean regulators. Terraform Labs, the South Korean parent company of LUNA, saw a drastic fall from grace that resulted in massive market losses, adding to the climate of suspicion surrounding local cryptocurrency exchanges.
