Coinnest Sets for Closure
Coinnest, one of the largest crypto exchange centers in the South Korea, announced its closure in a post-it published on its website. In this announcement, users are asked to exit their assets from this center until April 30. Also, to facilitate the process of exiting, transfer fees will be decreased to their lowest. According to an official in this company, this decision is the natural result of decreasing the volume of trades and the problems resultant from regulation.
Coinnest is the crypto exchange center based in South Korea that at first provided services to the citizens of this country. Yet it also has the capacity to provide services for anyone from anywhere in the world. The services of this center are being offered in three languages of English, Korean, and Chinese. Currently, it is possible to buy and sell more than 30 cryptocurrencies in Coinnest. This crypto exchange center was launched in 2017 with the support of Chinese investors in Seoul, the capital city of South Korea, and is currently the third largest crypto exchange center in this country. This center uses the Hot storage method to store users’ digital assets. Though this method is more vulnerable against cyber-attacks than the Cold storage, as the officials of this company claim, Coinnest online servers are very resistant against cyber-attacks.
The economic problems of this crypto exchange center came after the betrayal of its CEO and involvement of Korean judicial authorities. This scandal greatly damaged the reputation of Coinnest. Kim Lk-hwan, the CEO of coinnest, was arrested along with two other executives of this company last year on scamming and embezzlement charges. These people had transferred the digital assets of people, worth billions of Yuan (South Korea currency), to their own accounts. This is the first time in the history of South Korea that an official in the field of cryptocurrencies is being indicted. After this incident, Korea Blockchain Association, comprised of 33 crypto exchange centers in South Korea, announced that it would make a decision on dismissing this center from the association.
The sentencing of Lk-hwan led to more sensitivity on the part of authorities and officials toward protecting users’ digital assets in a way that the Korean Fair Trade Commission ordered some crypto exchange centers to improve their security in protecting users’ assets. South Korea has the third largest Blockchain and the crypto market in the world. The occurrence of such incidents can threaten the brilliant future of this industry in South Korea.