The Heat is Up for Coin One and Its CEO, Chae Myung-Hoon
According to a Yonhap News report, Coin One has been found guilty of providing illegal gambling services to its customers, from November 2016 to December 2017. The Police of South Korea are preparing to file legal charges against the top officials of Coin One including the CEO and 20 other executive members.
Launched on August 2014, Coin One is a crypto trading platform, which in the recent years has become quite popular among Koreans, with its trading volume is at $34,342,088, as per Coinmarketcap latest reading.
On March 7, the cybercriminal investigation unit of the South Korean Provincial Police Department disclosed the plan to arrest three gambling masterminds including, Chae Myung-hoon, co-director of KHIMA. According to the media reports, they have been arrested on gambling and gross violation charges.
Is Margin Trading of Bitcoin Legal?
Coin One’s margin trading venture is the scandal in question. Being the third largest domestic exchange platform, the declining reputation of Coin One has adversely affected the cryptocurrency market in the past one year.
Margin trading is somehow like credit trading where trading is done on financial assets on credit. The attraction here is people can make big gains but may end up losing all their money too.
The Police set up their investigation back in August 2017. In the entire year period more than 19,000 marginal transaction users were found culpable but the Police Department convicted only 20 members so far who alone trade $3,000,000,000 illegally. According to the reports, most of the arrestees are between the ages of 20-50, and with stable 9am-5pm professional lives.
Chea Myung-hoon and Coin One has been found at fault for providing the services online to make the trades. Yet, these have been rendered and determined illegal use of gambling services, since they used to provide random members with an opportunity to gamble with virtual currency.
It is believed that the Coin One awarded its new subscribers up to 4 times their initial deposit; moreover, they charged absurd commissions on each trade. Coin One seems to be in violation of Chapter 23, which makes all gambling or this kind illegal in South Korea.
Representatives of Coin One however thought differently about the matter. Coin One has denied all the allegations, claiming they are false allegations and they were within the law.
“Coin One has not done anything illegal because its services were reviewed by lawyers prior to starting the margin trading service,” a representative claimed. “Coin One is focused on cooperating with the ongoing investigation, and will continue to do so as the case is in the process of moving over to the Prosecution Service from the Police Agency.”
South Korean Police 1-Year Investigation
It took a year to prepare the entire case against Coin One, which is South Korea’s third most successful virtual currency exchange. The case has dealt primarily with bitcoin and other virtual currencies being traded at the marginal level. There are few laws pertaining to this concept making it most difficult for the investigators to get all their facts in order.
The police department kept a close watch to transactions happening over this supposedly trusted platform and observed 20 high-volume traders makes bets as high as $2.78 million among 3,000 to 13,000 trades over Coin One.
The Korean Police affirmed that it will press further and pursue higher profiled bosses in the company. In addition, those fraud high-volume traders will be summoned to the prosecutor’s office.
In the recent years, the fever for crypto trading among the South Korean People is unparalleled. With two million crypto investors, this Korean nation is the largest markets for Bitcoin and Ethereum. Though there are always talks and rumors about Government banning cryptocurrency but present, no official declaration has been made on the same.
The End of Asian Crypto?
Recently, in China, the idea of Margin trading was forbidden, before a massive crackdown on exchanges and ICOs in the year 2017. Yet, China and its hard stance against all online gambling are setting the tone for all Asian crypto enterprises. With the recent bust of Ourgame and its employees arrested, it is not clear if any online gambling platform is safe.