Looting of user funds led to the detention of cryptocurrency exchange executives in South Korea
A looting plan is, indeed, a matter of shame when orchestrated by the top executives of a cryptocurrency exchange. This is exactly what has happened in HTS, a South Korea based cryptocurrency exchange. The President along with the executives of HTS are detained this week for stealing the funds of the users. These criminals have illegitimately reallocated the holding of the company in form of virtual currencies. These cryptocurrencies include ether and bitcoin. They are accused of manipulation of the user funds.
Southern Seoul police officials having Inspector Jeong Daeseong as the lead have applied for a detention warrant in this case.on 14th May, the arrest warrant are applied for the operator and main developer of HTS and two other executives.
The executives and the President are involved in the conspiracy to shift the user funds to bank accounts, externally located. These user funds were originally stored in cryptocurrency wallet.
Initially, HTS was spared of being raided as the entire focus of local police was on Coinnest. In South Korea, Coinnest was one of the top cryptocurrency exchanges which was shut down due to malpractice.
In a row of cryptocurrency exchanges to be under the scanner of South Korea police, HTS comes third. Coinnest and Upbit have previously been under scrutiny, as reported by BCFoucs. However, after the police investigation, Upbit was left free without any penalties and charges.
Security and safety of the user funds are maintained by the cryptocurrency exchanges through hot and cold wallets. The hot wallet has a connection with the internet and is easily accessible. On the contrary, the cold wallet has no connection with the internet facility and is operated offline.
Initially Coinnest and HTS transferred large amount of user funds without sending any alert. No alert was sent to the clients and authorities while moving the funds in cold wallets. The illegal transfer of user funds came under the vigilance of the authorities when full audits were conducted. The balance sheet of both the exchanges helped the authorities to get a clear picture of the illegal transfer.
(Image source: Shutterstock)
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