There is no shortage of controversy in the cryptocurrency industry these days. All major trading platforms are being scrutinized by users all over the world. Numerous allegations regarding fake trading volume have surfaced in recent years. Although most of those claims have not been proven, it seems several individuals associated with Komid will face serious jail time.
THE KOMID TRADING VOLUME SCANDAL
South Korea is quickly becoming one of the more prominent regions in terms of cryptocurrency trading. All of its domestic exchanges are doing extremely well these days. Bigger companies such as Bithumb, Korbit, Upbit, and others all see a healthy increase in overall trading volume as of late. Where some smaller exchanges are concerned, however, there are still concerns over how their trading volume is established exactly.
One such exchange facing a lot of scrutiny comes in the form of Komid. Although it is not necessarily known among Western cryptocurrency traders, the platform had – seemingly – noted strong growth in the domestic market as of late. After carefully reviewing the platform’s trading volume, however, it quickly came to light some things were not adding up in the slightest. In fact, at least two of its executives have been charged with faking the platform’s trading volume on more than one occasion.
To date, both Komid CEO Hyunsuk Choi and director Mo park are sentenced to jail for getting involved in this illicit activity. Although one could argue artificially inflating an exchange’\s trading volume shouldn’t be subjected to jail sentences, the Korean government doesn’t take too kindly to such illicit practices. Especially when millions of transactions allegedly recorded on the exchange have never taken place in the first place.
What is very bothersome about this entire ordeal is how these individuals managed to make a lot of money by faking the trading volume. It is expected roughly $44m worth of profits were generated through this trading platform. Because of this “success”, the platform attracted a lot of new users who were eager to buy specific currencies. In the eye of Korean officials, this is on the same level as committing fraud, which is subject to severe jail sentences.
The main question is whether or not these are the only individuals involved in this fake trading volume scheme. Although it is evident their own company is one culprit, it is very likely other cryptocurrency exchanges around the world are engaging in very similar activities. Greed often brings out the worst in people, thus it is only normal some company owners are tempted to try their hand at something completely different. Being dishonest will only work for so long, though.
Whenever information like this comes to surface, it deals a major blow to the cryptocurrency industry as a whole. Especially South Korean exchanges have seen many fraud and fake trading volume allegations. Despite those claims, Komid is the first exchange to be found “guilty” of partaking in such illicit activities at this stage. Even so, it seems likely to assume the investigations will continue for quite some time to come, as some of the exchanges active in the region tend to raise a lot of questions.