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Arrest warrants were issued to employees of South Korean cryptocurrency exchange

On Monday, May 14 local media reported that arrest warrants have been issued to employees of a South Korean cryptocurrency exchange. Three of the company’s executives, who operate cryptocurrency trading site HTS Coin, were arrested for suspicion of fraud and embezzlement.

The Financial Investigation Division 2 of the South Korean Prosecutor’s Office demanded a warrant for three employees, including the CEO of HTS Coin. The other two employees are a system operations manager and a program developer.

The prosecution says that Shin (the representative director) and his employees are suspected of taking money out of their accounts by transferring customer funds from a bank account to another account.

The three are also suspected of deceiving investors, by pretending to have cryptocurrencies on the computer side without having real cryptocurrencies.

The prosecution believes that accused individuals have falsified records and used the money in the customer’s account as a personal account of the exchange.

In response to media reports the exchange posted a notice on its website maintaining that «All services except Korean won deposits, such as Korean won withdrawals, coin deposits, and coin withdrawals, are operating normally».

«HTS Coin is currently under investigation by the prosecution and we are working diligently. Unlike external concerns, we still have 100% of your deposits and coins. We keep customer deposits and coins that can be withdrawn promptly even if all customers request a withdrawal at the same time», – wrote the exchange.

Last week the prosecution also started investigating South Korea’s largest cryptocurrency exchange Upbit. According to prosecutors, the company has been transferring funds from customer accounts to a separate account, which is suspected to belong to an executive at UPbit.