It was only a matter of time before Coinnest was forced to shut down, but nobody expected it to be quite so far into the year. In a statement on the exchange’s website, the platform announced its plans to close its doors for good on the last day of June 2019. During April 2018, Kim Ik-hwan – Coinnest’s CEO – was arrested and charged with embezzlement. Then in January 2019, an airdrop went awry and ended up costing Coinnest a further $5 million. These events severely damaged the exchange’s liquidity pools and left it hurting.
Combine these two events with the protracted crypto winter that claimed numerous top crypto exchanges and you have the perfect storm for Coinnest to finally sink beneath the ebbing waves of the crypto world.
June 2019 is Deadline Day
Users of the embattled crypto exchange have until the end of June 2019 to withdraw all their funds from the platform. In order to help traders pull out their funds before time runs out, the exchange is lowering withdrawal fees and minimum withdrawal amounts. This will allow crypto traders to withdraw every last satoshi from their account and store it safely on their own hardware wallet. The ability to create new accounts has been disabled already, while deposits and transactions will cease to function from April 30th.
Drama on the Korean Peninsula
Coinnest isn’t the only Korean crypto exchange to suffer an untimely demise due to embezzlement. Earlier this year, Coinbin had to file for bankruptcy following a rogue employee embezzling more than $26 million in Bitcoin and Ethereum. More than $2 million is untraceable with the remaining $24 million is being watched very closely. Following the Mt. Gox drama, Korean crypto traders are beginning to fear that embezzlement and bankruptcy is a common occurrence.
Fake Volume from Korea
It isn’t just a raft of embezzlement scandals plaguing the Korean crypto scene. Executives from Komid and Upbit are both facing jail time for faking more than 5 million transactions on their exchanges to help climb up the trade volume rankings. An estimated $45 million was generated through this fake volume on Komid alone – making the scandal rather scary. It’s an issue that’s plaguing the crypto industry, but many new exchanges are becoming transparent in order to combat these claims.
It’s a sad day for Coinnest and all of its users, but after a tough 12 months the exchange has finally heading for the chop. If you have any funds left in Coinnest, pull them out before it’s too late.