Coinone Employees Manipulate Cryptocurrency

According to the local news outlet The JoongAng, an indictment issued on May 22 revealed that four individuals named Mr. Jeon, Mr. Kim, Mr. Ko, and Mr. Hwang in court proceedings, all of whom were employees of the South Korean cryptocurrency exchange Coinone, allegedly profited more than 2.98 billion Korean won ($2.26 million) through illicit means during coin listings from various projects.

At least 46 coins were involved in the incident from November 2019 to December 2022, representing nearly 25 percent of all tokens listed on Coinone.

Prosecutors claim that Coinone executives and employees demanded that projects sign a market-making (MM) contract with a specific MM company via brokers before a coin’s listing.

This was done to ensure sufficient liquidity in the trading volume following the listing of the new coins.

However, the contract’s recipients allegedly engaged in illegal activity by artificially increasing trading volume and prices via cross-trading.

Executives of Coinone are also alleged to have offered to remove “listing deposits” if projects signed such contracts.

Two senior Coinone executives and two Coinone brokers were charged with breach of trust and obstruction of business in connection with their alleged market manipulation activities.

Coinone is a significant cryptocurrency exchange in South Korea, with a 24-hour trading volume of $27.2 million.

Regarding the individuals’ actions, prosecutors stated:

“Coinone is a major cryptocurrency exchange in South Korea, with total trading volume of $27.2 million in the past 24 hours, according to industry data.”

Regarding the activities of the individuals, prosecutors said, “These price manipulations cause general exchange members to misunderstand the trading volume and market price and induce them to participate in the coin transaction and purchase the coin.”