The South Korean cryptocurrency exchange has now declared bankruptcy, according to Korean news outlets. This comes after the exchange has suffered several millions of dollars in losses, largely due to suspected embezzlement.
Coinbin cited government regulation and increased debt in addition to the embezzlement
The cryptocurrency exchange in question is Coinbin. Coinbin initially posted a notice in Korean on its website this past Wednesday. Specifically, the statement is said to have conveyed that Coinbin would cease business operations as a direct result of ”government regulation” and ”increased debt”.
The notice argued that a regulatory decision to suspend Coinbin’s capacity to issue virtual user accounts was a major factor in the closure. Furthermore, increased operating expenses – as well as liabilities stemming from the collapse of hacked cryptocurrency exchange Youbit, which was taken over by Coinbin – supposedly played a part in this.
It would seem, however, that there is more to this story than regulatory uncertainty and operating expenses.
Specifically, a recent report from Business Korea further outlined this, noting that Coinbin’s CEO, Park Chan-kyu, had announced bankruptcy on February 20th. Following this, all cryptocurrency and cash settlements were reportedly halted, and bankruptcy procedures have since commenced.
Moreover, Park went on to note that the previous CEO of Youbit, who has since been an employee at Coinbin, had apparently embezzled funds at Coinbin as well. Park also said that Coinbin is now getting ready to take legal action:
”We are preparing to file for bankruptcy due to a rise in debt following an employee’s embezzlement.”
Hundreds of cryptocurrency wallets reportedly affected
According to Park, this employee had apparently gotten his hands on the keys to hundreds of cryptocurrency wallets. Furthermore, the employee had then claimed that the cryptographic key to one Ethereum wallet had, in fact, been lost.
Coinbin’s official statement also referenced a ”corporate executive moral hazard” as one of the reasons for its closure. This appears to be in reference to the aforementioned employee, and the notice also said that Coinbin is making efforts to recover the funds.
Moreover, the previously mentioned Business Korea report also noted that Coinbin’s total losses amounted to around $26 million. The details of this entire affair seem quite murky, and it will no doubt continue to unfold in the coming weeks and months.
This bankruptcy announcement comes as the cryptocurrency industry is still shaken by the fallout of another notable cryptocurrency exchange controversy – that of Canadian exchange QuadrigaCX.
Rasmus Pihl is a writer for Toshi Times by day and an avid follower of the blockchain industry by night. Rasmus holds a Bachelor’s Degree in Marketing from the Gothenburg School of Business, Economics, and Law and runs a Swedish marketing consulting firm. Moreover, when he isn’t writing for Toshi Times, traveling, working or changing the world in some other capacity, Rasmus is more than likely caught up in postgraduate studies.