South Korean Exchange Coinbit Arrested For Fake Volume

[bitcoinst]

Coinbit, South Korea’s third-largest cryptocurrency exchange, has reportedly been seized by police over allegations it faked most of its trading volume.

According to a report from Seoul Newspaper on Tuesday, local police raided and confiscated the company's Gangnam headquarters and other premises.
Accused of fraud, the firm's owner, Choi Mo, and other managers are said to have artificially inflated volumes on the exchange by using "ghost" accounts to make fake trades, a practice known as wash trading.

In its report, Seoul Newspaper said it had been informed by insiders of corruption at Coinbit months ago and that up to 99% of trading volume was "manipulated" on the platform.
Police allege wash trading at Coinbit had produced over 100 billion won ($84 million) in faked income.

The newspaper said it had put off reporting its findings until the raids at the request of the Investigation Department of the Seoul Metropolitan Government.
An accounting firm had reportedly refused to work with the firm after viewing its books.

Seoul Newspaper said it had seen the books and that 99% of recorded trades could not be associated with deposits or withdrawals.

https://www.coindesk.com/south-korea-crypto-exchange-coinbit-seized-allegations-fraud-wash-trading


Coinbit https://coinbit.co.kr/ not Coinsbit https://coinsbit.io/

[livingfree]

A very good initiative from the South Korean government.

They should always be paying attention to those exchanges that shows fake volumes as it's very misleading. The other exchanges that's based on South Korean will now start to be true and honest with their volume.

If, they don't want this to happen to them.

[pakhitheboss]

Exchange are known for fake volumes but never heard authorities taking action for misleading customers until today when I read this post. A very good initiative by the South Korean authorities, this incident will caution others to stop using this malpractice which misleads customers. 

[Tipstar]

That's one good boost for crypto regulations. A unregulated industry doesn't mean you can do frauds and make up false claims. This would surely improve the quality of Korean exchanges making good way ahead for other competitors. Even the largest of crypto exchanges are accused of fake volume and as there are no entity to look over them, they get away with everything they want.

[meanwords]

That exchange got too greedy. I know that a lot of exchanges do wash trading but most of them doesn't get caught because of how careful they are and they only wash trade at a certain limit. Imagine wash trading 99% of the profit of the exchange. Good thing the South Korea authorities are vigilant in this type of things and got this misleading exchange down.

[Yogee]

....Coinbit https://coinbit.co.kr/ not Coinsbit https://coinsbit.io/

LOL. They can't even come up with a different name.

The exchange is still listed on Coingecko and Coinmarketcap and maybe other platforms but good on them for issuing a warning at the top of the page.
- https://coinmarketcap.com/exchanges/coinbit/
- https://www.coingecko.com/en/exchanges/coinbit


From this case, maybe we should consider asking for the audited books of the company aside from registration and license before we trade there? I'm not saying it's guaranteed that they're not involved in any wash trading if it was reviewed by a reputable third party accounting firm but it can be considered as another layer of security.  

[dimonstration]

Upbit, probit and otherbit soon. Most of the korean exchanges are faking there volume that’s why most of the coin listed there was pump and dump. They will pump new list coin up to a huge percentage for a short time span then dump same percentage. Koreans are so good on faking volumes to FOMO korean investors. Most of korean investor that I met on telegram are shilling and it makes sense why they used to be on that activity.

[ice18]

That exchange got too greedy. I know that a lot of exchanges do wash trading but most of them doesn't get caught because of how careful they are and they only wash trade at a certain limit. Imagine wash trading 99% of the profit of the exchange. Good thing the South Korea authorities are vigilant in this type of things and got this misleading exchange down.

Actually its really easy to tell if exchange uses fake volumes just see it at your own eyes trading automatic even if not in orderbook you can see it in trade history many exchanges doing this like Bilaxy, Bikex, Latoken and many more this is the proper way to stop this exchanges immediate closure and confiscate all devices.

[benthach]

very good. south korean usually the leader when it come to law and order, just like they jailed their president Park Geun-hye etc.. it is not possible in the u.s or europe countries, their leader is not accountable for anything, example is trump. western countries usually have fake law and order, south korea and japan is the leader in this.

[bitcampaign]

actually not only coinbit but there are also several exchanges full of bots to create fake trading volumes, but usually it depends on their respective intentions, one of which is to attract people's attention to trade there, it's a more powerful way to attract new users and new traders, but whatever it is, the behavior of the exchange is still wrong

[Baimovic]

the right decision, especially the government in South Korea, thus there will be no more traders who experience losses, especially those who trade on exchange coinsbit (Korea). i have guessed that this exchange is a ponzi scheme or the trading volume there is fake. and at least this result can reduce some of the other exchange scams.

[Gorosden]

What?  how is this possible? Almost all exchanges in crypto space use fake volume, I guess this move will be eye opening for other countries too, many more could be arrested, I don't know what to say but I think exchanges should stop supporting projects that has no volume, lack of demand is the reason why some exchanges use bot trade and fake volume

[LouVandetta]

A very nice move from their goverment. Ever since like I could remember having a fake volumes or manipulated trades from a certain exchanges are a thing now. I don't know how many are there, but I'm sure there are pretty much the same, especially to boost up a certain coin so it will gain popularity I guess. This thing might be a good example so another exchanges that has a hidden agenda going on would think twice to do their job.

[Apostlekin$$$]

It will be very good to see governments going after exchanges with fake volume, moreover all these exchanges are centralized exchanges so they aren't out of reach for the government, many exchanges need to be erased, p2pb2b exchange, exmarket, vindax etc all need to go.

[Genemind]

I hope this will be a lesson to those exchange who intentionally fakes their volume.

the right decision, especially the government in South Korea, thus there will be no more traders who experience losses, especially those who trade on exchange coinsbit (Korea). i have guessed that this exchange is a ponzi scheme or the trading volume there is fake. and at least this result can reduce some of the other exchange scams.

What do you mean no more traders will experience losses? Their government's action doesn't secure trader's income. It removed the risk for traders in trading in such platform, but it doesn't secure that they will not lose anything when trading.  

[mersal]

IMO, most of the exchanges do that but the regulation differs upon countries so many exchanges are not getting any actions for their fake volumes, it is a good news for the trading community but they can move their exchange to other country where regulations are more relaxed and can keep doing it.

[Phoenix_PROG]

IMO, most of the exchanges do that but the regulation differs upon countries so many exchanges are not getting any actions for their fake volumes, it is a good news for the trading community but they can move their exchange to other country where regulations are more relaxed and can keep doing it.

I hope other countries will have this same move against all exchanges with fake volume honestly, bad projects are able to hide, pretending things are fine using fake volumes on exchanges and not all new traders and investors can spot fake volumes, it's unfair

[adzino]

Good that it has happened. More such shit exchange should be taken down, but unfortunately those shit exchange operate illegally and hide themselves very well.
I guess coinbit was legally operating in South Korea and was faking the volume.

Coinbit, South Korea’s third-largest cryptocurrency exchange, has reportedly been seized by police over allegations it faked most of its trading volume.
In its report, Seoul Newspaper said it had been informed by insiders of corruption at Coinbit months ago and that up to 99% of trading volume was "manipulated" on the platform.
Police allege wash trading at Coinbit had produced over 100 billion won ($84 million) in faked income.

But, looks like they were manipulating the volume not to attract more users or pump fake coins. They faked it as "income", so sounds like they were trying to or helping some launder money through their exchange.

[yazher]

This is how it should be regarding this old issue. now they're making them pay with what their frauds have done. Faking volume is a serious matter you know? people often see the volume of tokens or coins before investing in it. the problem with these kinds of exchanges, they don't really care if their investors have bought from them some coins that have some fake volumes circulating on their exchanges. These guys are like those scammers who make falls promises to the investors. it's best that they got caught red-handed with this act so that the other will take heed about doing this kind of method in the future.

[elda34b]

It removed the risk for traders in trading in such platform, but it doesn't secure that they will not lose anything when trading.  

Maybe he meant to say that traders would be able to avoid he fake depth so they don't sell in loss (due to the lack of liquidity where a $1k can bring the price down 25% in real-time.