NewsMarch 16, 2018 by David Nugent

S.Korean Crypto Exchanges Raided, Displeasure Over Kakao ICO

According to South Korean magazine Chosun, prosecutors have taken control of three cryptocurrency exchanges for misappropriation of customers’ funds. South Korea’s securities watchdog FSA (Financial Services Commission), however, did not disclose the name of the defendant or the list of assets seized from them.

Separately, the Chairman of South Korea’s FSA Choi Jong-gu expressed his displeasure over the planned ICO from KaKao Talk, a popular mobile messaging app.

As far as raid is concerned, executives and staffs are alleged to have siphoned funds from the trading accounts of customers and used it for purchasing cryptocurrencies from other exchanges. It is believed that the Seoul Southern District Prosecutors’ Office has confiscated hard drives, documents, and mobile phones in search for evidence.

One of the prosecutors stated

“The firms turned up on our radar in January during our investigation of suspicious money transfers between Bitcoin exchanges that were detected during an audit by the Financial Services Commission and the Korea Financial Intelligence Unit.”

Last week, KaKao announced plans to launch a blockchain under the name “KaKao blockchain.” The native currency of the blockchain was named as ”KaKao Coin.” The cryptocurrency will be the medium of exchange in the upcoming ventures of the company. A detailed business plan is expected to be announced next Tuesday.

Choi Jong-gu acknowledged that he doesn’t have powers to stop the overseas ICO. Choi said

“It is difficult for KaKao, the main shareholder of the Kakao bank, to lend credibility to the KaKao bank during the ICO”.

South Korean authorities have banned ICOs in the country as they believe that it could be used as a channel for money laundering. KaKao has planned conducting its ICO in HongKong or Singapore, where the company has subsidiaries.