Projects allegedly signed agreements with questionable market makers in exchange for being considered for listing on cryptocurrency exchange Coinone.
Four people, Mr. Jeon, Mr. Kim, Mr. Ko, and Mr. Hwang, who worked at the South Korean cryptocurrency exchange Coinone, have been charged with employing illegal ways to make more than 2.98 billion Korean Won ($2.26 million) in profit.
From November 2019 until December 2022, the incident, which involves currency listings from numerous projects, took place. With at least 46 coins involved, these individuals represented roughly 25% of all tokens listed on Coinone.
Market-Making Contracts Used for Manipulation, Prosecutors Allege
Prosecutors claim that before projects could list their currencies, Coinone officials and employees made them sign market-making contracts through brokers. This was done to make sure there was enough liquidity and trade activity.
However, it is claimed that by artificially inflating trade volume and prices through cross-trading, the receivers of these contracts participated in unlawful activity. The executives also allegedly enticed projects into signing these contracts by offering to waive listing deposits.
Charges Filed Against Coinone Executives and Brokers
In connection with their alleged market manipulation actions, four people, including two senior executives and two brokers from Coinone, have been charged with breach of confidence and obstructing commerce. South Korean cryptocurrency exchange Coinone is well-known for its huge trading volume, which reached $27.2 million on the previous day.
The indictment provides insight into the difficulties cryptocurrency exchanges face in maintaining market integrity and discouraging illegal activity. The verdict in this case will have a big impact on market laws going forward as well as how exchanges, projects, and investors interact in South Korea’s cryptocurrency ecosystem.