A lot of people look for ways to earn a quick buck, but Karma always has a way of catching up. It may not be tomorrow, or next week, but it will definitely happen. Employees at three cryptocurrency exchanges in South Korea have now learned that lesson, having been arrested for alleged embezzlement of their clients’ funds.
Prosecutors with the Seoul Southern District Prosecutor’s Office made the arrests following raids of three exchanges this week, according to a Chosun report. The exchanges became targets of investigations in January when prosecutors were looking into suspicious money transfers between cryptocurrency exchanges.
The employees and executives were accused of taking the funds to use for purchasing digital assets on other exchanges, according to the report. Computer hard drives, documents and cell phones were confiscated during the raids. The individuals, who weren’t named, all face embezzlement charges.
The exchanges will now be overseen by the Financial Services Commission (FSC), the country’s financial director. The FSC has also been looking into possible insider trading in the cryptocurrency industry by some of its own staff, and promised to announce any results of the investigation to the public. It banned anonymous cryptocurrency trading accounts in January in an effort to make it more difficult for criminals to finance their activities through crypto.
The South Korean government has taken a hard stance against cryptocurrency companies in the country. It is tightening the screws on rampant speculation and possible money laundering through exchanges. In January, about $600 million in questionable transactions occurred, mostly between South Korea and Australia accounts, and did not provide the required paper trail of sources for the funds.
Initial coin offerings (ICOs) became prohibited in September of last year, but now the country might be exploring loosening regulations somewhat. The specifics have yet to be released, but an announcement by officials with the Financial Services Commission alluded to a change in policy, provided companies that launch ICOs follow a specific set of criteria. That criteria has yet to be published.
Officials in the country are currently working on joint cryptocurrency controls with both Japan and China. Despite China’s complete ban on ICOs, if the trio of countries can come together to create policy, it will be a huge step forward for the cryptocurrency industry. While many oppose to governmental oversight, it goes without saying that, at some point, it’s going to happen.
Note: Tokens in the SegWit chain are referred to as SegWit1X (BTC) and SegWit Gold (SWG) and are no longer Bitcoin. Bitcoin Cash (BCH) is the only true Bitcoin as intended by the original Satoshi white paper. Bitcoin BCH is the only public block chain that offers safe and cheap microtransactions.
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