South Korean exchange Coinone execs indicted in paid listing, market manipulation scandal

Four individuals have been indicated in relation to a listing scandal at the South Korean crypto exchange Coinone, The JoongAng said on May 21.

Two executives, two brokers indicted

According to prosecutors, Coinone listing team leader Kim Mo and Coinone listing broker Hwang Mo were both indicted. Two others were additionally indicted.

Coinone’s former Chief Sales Officer (CGO), Jeon Mo-ssi, was also investigated three times in March and April, though it is unclear whether he was indicted.

Coinone executives accepted payment to list at least 46 of the cryptocurrencies now available on their exchange. That number represents 25% of all cryptocurrencies listed on Coinone, though prosecutors say this number could increase as investigations continue.

In total, Coinone members received a total of 2.98 billion won ($2.27 million) in exchange for listing the relevant cryptocurrencies.

Coinone engaged in market manipulation

In addition to requiring payment from parties that sought to have their coin listed, Coinone encouraged some parties to facilitate market manipulation.

Coinone executives reportedly encouraged listing parties to sign a contract that compelled them to submit orders through market-making firms. The market maker then manipulated prices and falsely increased trading volumes through cross-trading. In exchange for signing those contracts, Coinone waived the listing deposit for the listing party.

The market manipulation described above misled exchange users about the relevant cryptocurrency’s volume and price, prosecutors said.

Officials said that they have not previously prosecuted a case of fraud against ordinary investors related to illegal market-making in the crypto market.

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