Things haven’t been looking good for many South Korean crypto market players recently. Now, as per a report by Business Korea, yet another popular crypto exchange called Coinbin declared bankruptcy.
The shocking news was relayed to Business Korea by CEO of Coinbin, Park Chan-kyu on the 20th of February in Seoul, Korea. According to it’s CEO, the exchange had to resort to filing for bankruptcy after the embezzlement of funds by one of it’s employees which led to $26 million in damages.
Park made this statement in the report, “We are preparing to file for bankruptcy due to a rise in debt following an employee’s embezzlement.”
The discovery was made after it was established that the employee who embezzled the funds lied about accidentally losing the company’s private keys to access their Bitcoin and Ethereum wallets. However, according to the company’s CEO, this was impossible as said employee was a cryptocurrency expert.
In a further statement Park revealed that the perpetrator of the crime was in the top tier of the company and had previously served as CEO for Youbit as well. Preparing for the impending damages and financial loss ahead, Coinbin was forced to stop all withdrawals and transactions in both crypto and fiat currency.
Shedding some light on the future of their customer’s re compensation, Park stated that out of the $26 million in damages, an amount is to be returned to former Youbit members and is valued at 27 billion won, however, he also added that the company will follow bankruptcy procedures.
Coinbin was founded after a take over was initiated on another South Korean exchange called Youbit, after it suffered a loss of 17 billion won due to hacking back in 2017. And now it looks like the tables have turned for Coinbin who are now the ones incurring some serious damage.
In 2018, NewsBTC reported that according to a new study which was issued by the South Korean National Police Agency titled, “Status and Measures of Hacking Damage of Virtual Currency Exchanges in the Last Three Years,” hackers in the country have stolen a whopping $99 million worth of cryptos since 2016.
The study also ascertained that cyber crime related to cryptocurrencies has risen exponentially and a main reason for that may be the fact that most crypto exchanges and wallets have failed the government’s security tests.