QUADRIGA INITIATIVE
CRYPTO WATCHDOG & FRAUD RECOVERY PLATFORM
A COMMUNITY-BASED, NOT-FOR-PROFIT
UNKNOWN
JUNE 2020
SOUTH KOREA
HTS COIN
DESCRIPTION OF EVENTS
"Korea Blockchain Co., Ltd., an electronic money exchange, announced that it has developed and opened 'HTScoin', which guarantees safe transactions for all customers."
"Provides a system for efficient analysis and investment for professional traders. Supports PC programs, mobile apps, and web-based exchanges for fast trading. Existing Securities who have experienced the familiar UI system provides pre-order and convenience features provides also easy to adapt to professional traders. Profit can be maximized by providing convenient speed orders when the direction of profit is predicted. Secure stable fintech technology providing a higher level of transaction system and differentiated solution than other companies. Thorough security authentication management. Practical partnerships with reputable institutions."
"Electronic Money Exchange Korea Blockchain Co., Ltd. developed and opened its homepage PC HTS version and mobile app version under the motto of “the world’s best cryptocurrency exchange that is safe and efficient”." "Company name: Korea Blockchain Exchange Co., Ltd. | Representative: Donghwa Shin| Address: 15th floor, 238, Teheran-ro, Gangnam-gu, Seoul (Yeoksam-dong) | Business registration number: 137-86-53346|"
"[A] familiar UI is provided with the securities system that has been experienced previously, and for safe transactions of customers, a triple security system is established and a specialized security company is installed to respond 24 hours a day, 365 days a year."
"In order to accept bitcoin, Goto Mall has partnered with a local cryptocurrency exchange HTS Coin. The exchange, which opened last month, has developed a smart payment system using cryptocurrencies and has recently launched a mobile app."
"After January 30th, the real name verification deposit and withdrawal account service will be implemented in accordance with the government policy."
"[S]ome of the employees of HTS Coin crypto exchange were taken into custody last September on charges of fraud." "Three of the company’s executives, who operate virtual currency trading site HTS Coin, were arrested for [suspicion of] fraud and embezzlement,” Money Today wrote." "The officials were cross-examined by police on Monday morning, ahead of the decision to issue the warrants for their arrest."
"The Financial Investigation Division 2 of the South Korean Prosecutor’s Office “demanded a warrant for three employees, including…[the] CEO of HTS Coin,” Token Post detailed, adding that the other two employees are a program developer and a system operations manager." "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 publication explained that 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 they have falsified” records and “used the money in the customer’s account as a personal account of the exchange,” Joongang added.
"Responding to media reports, the exchange posted a notice Monday 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 posted a response on their website, in a bid to reassure their customers that deposits and coins are available as promised, and confirmed the exchange is liquid should investors be looking to withdraw their funds."
"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."
"All services of HTS Coin were finally terminated at 18:00 on Sunday, June 15, 2020."
"We would like to express our deep gratitude to our customers for their support to HTS Coin so far, and please refer to the [Information] below for more details after the service has ended."
"Customers with unreturned assets can leave a direct inquiry by entering their subscription information at the bottom of the current page, or leave a request regarding unreturned assets to the company directly through our official email, info@htscoin.com. There is. Telephone consultation is not supported after the service end date."
"We do our best to respond to customers' smooth return of assets by separately managing the asset status of customers who have not returned assets."
HTS Coin was a cryptocurrency exchange platform in South Korea. Upon suspicion of employees embezzling customer funds (including the CEO), the platform was shut down by authorities. It's unclear the specific evidence and outcome, however the exchange appears to have insisted they are fully backed and honoured withdrawals.
HOW COULD THIS HAVE BEEN PREVENTED?
Under our framework, we recommend regular reviews of platforms to ensure that all customer assets are backed. This includes a cryptographic proof that any customer can use to ensure they were considered in the validation. Further certainty can also be provided through visible blockchain wallets.
Multi-signature wallet ensure that all platform operators are aware of outgoing transactions and no single operator can remove any funds.
Executives Of Komid Crypto Exchange Imprisoned For Faking Volume (Sep 19)
HTS코인-빠르고 안전한 HTS방식 가상화폐거래소 (Oct 14)
HTS코인-빠르고 안전한 HTS방식 가상화폐거래소 (Oct 14)
South Korea’s Largest Underground Mall Adds Bitcoin Payments to 620 Stores | Bitcoin Insider (Oct 14)
㈜한국블록체인, 안전한 비트코인 거래 보장하는 ‘HTScoin’ 전격 오픈 - 조선비즈 (Oct 21)
HTScoin, 개인정보 유출 방지 자체 행동요령 제시 (Oct 21)
Arrest Warrants Issued to Employees of South Korean Crypto Exchange | Bitcoin Insider (Oct 21)
Arrest Warrants Issued to Employees of South Korean Crypto Exchange – Exchanges Bitcoin News (Oct 21)
South Korea police search for 3 crypto exchange employees - CoinGeek (Oct 21)
