THE South Korean prosecutors could expand their investigation on cryptocurrency trading platforms locals who take bribes to list certain tokens, if more evidence is uncovered during the ongoing investigation. Lax regulation in the cryptocurrency industry in South Korea has allowed cryptocurrencies to be listed through backdoor and illegal channels. A former employee of the South Korean cryptocurrency exchange Coinone was arrested last month for allegedly accepting approximately US$1.5 million in bribes from brokers commissioned by token issuers to list approximately 25 cryptocurrencies on the platform.
The arrest of this employee led to the questioning of Coinone CEO Cha Myung-hoon as a potential witness to the alleged crime. Seoul prosecutors also raided the home of Lee Sang-jun, CEO of Bithumb Holdings, on similar charges. Manipulation of token listings through bribes is not a well-kept secret in the banking industry. crypto-South Korean currencies, according to Hwang Suk-jin, a professor at Dongguk University in Seoul and an expert in financial crime.
South Korea has not yet established legal framework for listing and deleting cryptocurrencies on trading platforms. The country announced in 2022 that it will develop the basic law on assets by the first half of 2023 to establish a comprehensive set of regulations for the industry. However, the 14 proposals made by South Korean lawmakers regarding the legal framework were never discussed in the National Assembly.
South Korea’s five major crypto trading platforms – Upbit, Bithumb, Coinone, Korbit and Gopax – have established the Association digital-asset exchange (DAXA), a joint cryptocurrency market monitoring organization aimed at preventing acts of unfair competition in the digital asset market. Starting in April, DAXA member companies will be required to include at least one third-party legal expert, free from any conflict of interest, to review a cryptocurrency’s listing.
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