The Seoul Metropolitan Police Agency has officially brought charges against the chairman of local crypto exchange, Coinbit and two other unnamed executives for manipulating the digital currency market, local media Newspim reported.

The city police are saying that the top exchange executives manipulated the cryptocurrency prices on the exchange from August 2019 to May 2020.

The South Korean authorities first moved against Coinbit in August when the local police reportedly raided and seized the operations of the exchange. The allegations on the exchange include inflating its trading volume by up to 99 percent.

Such practice of wash trading is common in the cryptocurrency market as a Bitwise pitch to the US Securities and Exchange Commission (SEC) last year highlighted that 95 percent of all Bitcoin trading activities were fake. However, later reports have significantly downplayed that number.

In wash trading, the exchanges buy and sell digital currencies at the same time, thus creating fake volume on the platforms to attract traders.

Crackdown on the Crypto Industry

Coinbit is the third-largest cryptocurrency exchange in South Korea with around 252,000 active monthly users. These alleged illegal activities have earned the exchange at least 100 billion won (about $84 million).

Some local media earlier reported 99 percent discrepancies on the books of Coinbit and the reported volumes, which revealed that one third-party accounting firm refused to work with the exchange after reviewing its books.

Furthermore, the South Korean authorities are investigating other major local exchanges for fraud. The police seized the operations of Bithumb, the country’s largest digital currency exchange, multiple times and summoned its chairman for investigating fraud charges involving tens of millions of dollars.