CEO of South Korea’s Komid Exchange Faces 3-Year Jail Term for Fabricating Trade Volumes

Recently, the Chief Executive Officer (CEO) of Komid, a South Korean crypto exchange, was sentenced to three years of imprisonment on grounds of having faked artificially high volumes of trade. After a court case that went on for a while, the judge announced that the CEO is up for a 3 year long jail term.

The CEO of the said cryptocurrency exchange is known as Choi and was accompanied in this trial by another employee of the exchange. The employee was sentenced to a sentence of 2 years. The grounds of his imprisoned included acts of misconduct, embezzlement and fraud.

According to the report filed in relation to the case, it seems that the crypto exchange in question had faked transactions numbering over 5 million, to show volumes much higher than they actually were. This resulted in about $45 million worth of transactions having been faked.

The judge who presided over the case said the following:

“Choi has committed fraud for a countless number of victims for a long period of time… He holds the financial authorities responsible for failing to keep track of the industry better.”

Over the past year, we have seen numerous headlines being made by instances of exchanges faking their respective trading volumes. This has become a very rampant problem in the sector, as competition intensifies and more and more exchanges attempt to win over the most number of customers they possibly can.

Just last month, another major cryptocurrency exchange from South Korea, Bithumb, faced allegations along the same lines. Crypto Exchange Ranks (CER) claimed that Bithumb was fabricating false versions of their trading volume statistic. Although Bithumb went on to vociferously deny the possibility of such an unscrupulous falsification having taken place, questions remained about how rampant the problem had truly become.

In fact, in December also, such allegations surfaced as the Blockchain Transparency Institute revealed research data indicting top cryptocurrency exchanges such as Huobi, HitBTC, OKex had been a part of wash trading.

With the incidence of so many of the top cryptocurrency exchanges faking their trade volumes, it is recommended to users that they conduct a thorough due diligence before choosing an exchange.