April 5, 2018 / 2:49 AM / 8 months ago

South Korean cryptocurrency executives detained over alleged embezzlement

SEOUL (Reuters) - Four executives from two South Korean cryptocurrency exchanges were detained on Thursday and are being questioned in connection with the alleged embezzlement of billions of won, prosecutors said.

One of the detained executives was Kim Ik-hwan, CEO of Coinnest, South Korea’s fifth largest cryptocurrency exchange. The other suspects were not identified.

“They are being questioned about the embezzlement of billions of won from their clients’ accounts and transferring it to their own,” an official from the prosecutors’ office told Reuters.

Coinnest was not immediately available for comment, although the company’s websites appeared to be operating as normal.

It is the first time employees of a local cryptocurrency business have been detained in South Korea, the world’s third largest cryptocurrency trading country.

South Korean authorities have previously vowed strong action against what they said were illegal, unfair movements in cryptocurrency trading after a bitcoin frenzy at the end of last year.

Related government agencies are now negotiating comprehensive regulations for cryptocurrency markets.

The official added that prosecutors will decide whether to issue arrest warrants for the detained exchange employees, adding they planned to investigate other virtual coin exchanges for possible crimes.

Reporting by Dahee Kim; Editing by Eric Meijer

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