The South Korean police are reportedly making ready to cost Coinone’s executives, together with its CEO, and 20 of the trade’s members. This follows a 10-month investigation on allegations that the trade offered playing providers by means of its crypto margin buying and selling program.
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Coinone’s Investigation Concludes
South Korea’s Cybercrime Investigation Unit of the Southern Provincial Police Division introduced on Thursday, June 7, its plan to convey prices in opposition to Coinone over the trade’s margin buying and selling service, native media report.
Coinone, which opened in August 2014, is the nation’s third-largest cryptocurrency trade, after Upbit and Bithumb. Its 24-hour buying and selling quantity is $34,342,088 on the time of this writing, in accordance to Coinmarketcap.
The police are reportedly recommending that the prosecutor’s workplace prices three of Coinone’s executives, together with CEO Myunghun Cha, in addition to 20 members. The previous will likely be charged with offering unlawful playing providers and the latter with illegally playing.
In South Korea, playing is a criminal offense underneath Chapter 23 of the Legal Act.
The investigation of Coinone “on allegations that the trade offered playing providers for margin buying and selling” started in August final yr, the Kyunghyang Shinmun wrote, elaborating:
The police concluded that the ‘margin buying and selling’ service of the digital forex trade is playing.
In accordance to the police, “The case was the primary investigation associated to the operation of a digital forex trade and it took appreciable time to evaluate the regulation,” Yonhap conveyed on Thursday.
Crypto Margin Trading vs Playing
Coinone and its executives have been accused of offering cryptocurrency playing providers by means of its margin buying and selling program from November 2016 to December final yr. The trade “allowed members to commerce up to 4 occasions the quantity of the deposit (margin) and to pay fee in trade for the transactions,” the information outlet described, including:
Margin buying and selling is analogous to the credit score buying and selling strategy of the inventory market, but it surely was primarily based on playing as a result of it was not licensed by the authorities and that it was concentrating on digital currencies as a substitute of shares.
The investigation reveals that 19,000 Coinone customers, between ages 20 and 50, had been utilizing the trade’s margin service. Most of them are both workplace employees, unemployed, or self-employed. Specifically, 20 members traded over three billion received [~US$2.8 million]. The information outlet famous that playing “can be utilized to accumulate felony proceeds, and due to this fact curiosity in cash and margin customers will likely be widened in accordance to the outcomes of the trial sooner or later.”
Coinone Denies Charges
All through the investigation, Coinone and its executives denied the fees and maintained that they “didn’t realize it was unlawful as a result of there’s a related service within the inventory market.” An worker of the trade was quoted by the information outlet saying:
We don’t suppose it’s unlawful as a result of it [the service] has been legally reviewed by legal professionals earlier than [we started] the margin buying and selling service.
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Photos courtesy of Shutterstock and Coinone.
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