South Korean police raided the offices of Coinbit, a South Korean currency exchange, on suspicion of widespread market manipulation.
Established in 2018 by gaming company Axia, the exchange has risen to become one of the most promising exchanges behind market leaders Bithumb and Upbit.
Details are unclear yet, as police have not released a full statement yet, but several media outlets in Seoul confirmed that officers raided Coinbit offices in the capital's rich Gangnam district, seizing property or data related to the stock exchange as part of their investigation.
Police also said that the company's CEO, only called Choi, and the other executives are suspected of tampering with business numbers and operating "fake" accounts - bogus customer wallets and moving digital coins into customer wallets that employees manage to artificially increase volumes.
Lee Jong Cheol, a blockchain business consultant in Seoul, told Cryptonews.com,
"This is a big blow to the industry. The exchanges here have been trying to clean up their business, with new compliance and security measures coming into effect. If these allegations are true, they could set the industry back for a year or more. At worst, they could be devastating to trading platforms, which would make it easier for them to come into play." It puts the health of the entire industry at risk. "
According to Seoul Shinmun, police suspect that up to 99% of the trading data released by Coinbit came from fraudulent transactions including Bitcoin (BTC), Ethereum (ETH), Ripple (XRP) and Teather (USDT).
