South Korea’s regulator said on Wednesday that it has taken control of three cryptocurrency exchanges, and that the venues’ officials have been prosecuted for alleged “embezzlement crimes.”
According to local media, the move is aimed at protecting consumer interests against the exchange’s unlawful practices. In other words, the action is not ‘directly’ related to the government’s recent crackdown to rein in the booming and volatile cryptocurrency sector.
Local outlet Yonhap quoted an official as saying one of the suspected exchanges is charged with transferring the virtual assets of a cryptocurrency trader to the account of the exchange’s representative or officer.
2020 Global Market Outlook: How the “Known Unknowns” Can Affect CurrenciesGo to article >>
Separately, the FSA prosecutors are expanding their investigations as an undisclosed exchange is accused of operating illegal fundraising business for investing in cryptocurrency-linked products.
South Korea’s Financial Services Commission didn’t disclose further details nor the names of the defendants and only said in a one-sentence statement: “It is difficult to indicate the specific amount of forfeited assets at this point.”
The latest development comes amid Seoul’s shift toward tighter regulation for cryptocurrencies. South Korea — which has been particularly seized by Bitcoin mania — has also been scrutinizing digital currencies exchanges, which were recently hit with massive tax demands, as part of ongoing efforts to control potential systemic risks.
On a related note, the Chairman of South Korea’s Financial Services Commission (FSA) today said he maintains “a negative stance” to the proposed ICO by the country’s internet giant Kakao, which owns the popular messaging app Kakao Talk.