The South Korean crypto exchange, Coinone, has been involved in a listing scandal, which has led to four individuals being indicted, according to The JoongAng on May 21st. Coinone’s listing team leader, Kim Mo, and Coinone’s listing broker, Hwang Mo, were both indicted along with two others. Coinone’s former Chief Sales Officer (CGO), Jeon Mo-ssi, was also investigated three times in March and April, but it is unclear whether he has been indicted.
Coinone’s Cryptocurrencies Listing Scandal
Prosecutors claim that Coinone executives accepted payment from parties seeking to have their coins listed on the exchange. Coinone listed at least 46 cryptocurrencies on their exchange, which represents 25% of all cryptocurrencies listed on Coinone. Prosecutors say that this percentage could increase as investigations continue. Coinone members received 2.98 billion won ($2.27 million) in total for listing the relevant cryptocurrencies.
Market Manipulation and Deception
Coinone encouraged some parties to facilitate market manipulation, according to prosecutors. Coinone executives advised 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 above market manipulation misled exchange users about the relevant cryptocurrency’s volume and price, prosecutors said. Officials stated that they have not previously prosecuted a case of fraud against ordinary investors related to illegal market-making in the crypto market.
The indictments related to Coinone’s cryptocurrency listing scandal highlight the risks faced by investors in the crypto market. Such scandals can impact the reputation of the entire crypto industry and lead to further regulatory scrutiny. It is essential for crypto exchanges and other market participants to operate transparently and ethically to maintain investor trust and confidence.