Korean Police Seize Coinbit for Massive Crypto Wash Trading

The Seoul Metropolitan Police Agency has reportedly raided and seized the operations of Coinbit, the country’s third-largest cryptocurrency exchange, over the allegations of inflating trading volumes.
As reported on Tuesday by the local newspaper Seoul Shinmun, the local police have confiscated the crypto exchange’s Gangnam headquarters, along with other physical premises.

The exchange was allegedly using “ghost” accounts to inflate the trading volume, a practice popularly known as wash trading. Per the reported, around 99 percent of Coinbit’s trading volumes were the result of such manipulations in the last few months, and this illegal means generated an income of at least 100 billion won (about $84 million).
The police have accused Coinbit owner Choi Mo and also other managers for their involvement in this market manipulation. Coinbit is among largest crypto exchange with 252,000 monthly active users, all of whom were affected by the fraud.
The local newspaper, claiming to have seen the books of exchange, is agreeing with the discrepancies in the deposits and withdrawals of 99 percent of the trading volumes. It also revealed that one anonymous accounting firm refused to work with the exchange after reviewing its books.
Along with the wash trading allegations, the authorities are also questioning the possibility of additional malpractice and embezzlement.
Can regulators eliminate crypto wash trading?
Wash trading is indeed a major problem within the cryptocurrency trading industry. Earlier, many established exchanges were accused of such malpractices, some to gain profits, while others to boost liquidity. In an SEC filing last year, crypto asset management firm Bitwise mentioned that .
Months after, another firm claimed that crypto wash trading on major exchange , however, the problem still persists.

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