South Korea’s Coinbin Files for Bankruptcy With $26 Mln Loss, Cites Employee Embezzlement

South Korea’s Coinbin Files for Bankruptcy With $26 Mln Loss, Cites Employee Embezzlement

Internal fraud is reportedly the reason behind a bankruptcy filing for South Korean exchange Coinbin

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Coinbin, the South Korean cryptocurrency exchange that took over hacked exchange Youbit, has filed for bankruptcy owing users almost $30 million, correspondence from the company confirmed on Feb. 20.

Coinbin, which acquired Youbit in 2017, is closing operations as the result of embezzlement from a senior executive, local media including English-language resource Business Korea subsequently reported.

“We are preparing to file for bankruptcy due to a rise in debt following an employee’s embezzlement,” the publication quoted CEO Park Chan-kyu as saying.

According to available information, the figure in charge of cryptocurrency management is at the center of the scandal, having previously served as CEO of Youbit. The latter ceased to exist in December 2017 after two major hacks made operations no longer possible.

The executive, known as Lee, reportedly appropriated the private keys of several hundred Bitcoin (BTC) wallets, while claiming to lose the key for an Ethereum (ETH)  wallet containing 100 ETH.

The total funds missing currently amount to 29.3 billion won ($26 million), of which 2.3 billion ($2 million) is reported as lost.

The revelations come as the cryptocurrency industry is already digesting the fallout from another exchange shutdown, Canada’s QuadrigaCX.

Currently the focus of legal proceedings and numerous rumors following the death of its CEO in December 2018, Quadriga owes its users around $190 million in crypto and fiat currency.


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Internal fraud is reportedly the reason behind a bankruptcy filing for South Korean exchange Coinbin

Owner of Hacked Crypto Exchange BitGrail Sentenced to Return Funds to Customers

Owner of Hacked Crypto Exchange BitGrail Sentenced to Return Funds to Customers

Italian bankruptcy court has ordered the founder of hacked Italian cryptocurrency exchange BitGrail to return as many hacked assets to his customers as possible

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Francesco Firano, the owner and founder of hacked Italian cryptocurrency exchange BitGrail, has been sentenced to return as much of the assets to his customers as possible. Scans of the court decision were released by the Bit Grail Victims Group (BGVG) on Medium on Jan. 28.

The Italian Bankruptcy Court published the sentence on Jan. 21. A post by the BGVG published the same day as the court sentence explains that “the court concluded that both Bitgrail and Mr. Firano, personally, be declared bankrupt, authorizing seizures of many of Mr. Firano’s personal assets.”

According to the post the Italian authorities already seized over $1 million in personal Firano’s assets, including his car. The post also notes that “millions of dollars in cryptocurrency assets have been seized from Bitgrail’s exchange accounts and moved to accounts managed by trustees appointed by the Court.”

The court ruling explains that “it was the BitGrail exchange that [because of a software flaw] actually requested to the node multiple times to allow the funds to leave the wallet” and “not the Nano network that allowed the multiple withdrawals. Furthermore, the exchange also reportedly stored all of its Nano cryptocurrency holdings in a “hot wallet,” which compromised its security.

The court notes that in July 2017, 2.5 million Nano were stolen from the exchange, and that Firano has been aware of it and announced that the involved exchange accounts have been blacklisted on Twitter in the same month. According to the ruling, in October of the same year — three months later — another 7.5 million Nano was stolen.

In December 2017 Firano converted the central wallet into a cold wallet and the exchange’s activity became reportedly intermittent. Prosecutors informed the court that Firano deposited a total of 230 Bitcoins (BTC) in his personal account on a cryptocurrency exchange between Feb. 2 and Feb. 5 in 2018, days before announcing the loss of the stolen assets.

As Cointelegraph previously reported, two United States law firms filed a lawsuit against the developers of Nano as well as BitGrail.

The lawsuit alleges that Nano and “key members of its core team” violated federal securities laws and directed investors to open accounts and place funds in “little known, and severely troubled” Italian cryptocurrency exchange BitGrail.

News broke about the hack when Firano allegedly asked Nano developers to alter the ledger by the means of a hard fork to restore the missing funds in February last year.


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Italian bankruptcy court has ordered the founder of hacked Italian cryptocurrency exchange BitGrail to return as many hacked assets to his customers as possible

Following Bankruptcy Filing, Mining Firm Giga Watt Reportedly Closes Day-to-Day Operations

Following Bankruptcy Filing, Mining Firm Giga Watt Reportedly Closes Day-to-Day Operations

Former top-five crypto mining firm has reportedly closed access and power to its facilities and shut down day-to-day operations

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Major crypto mining and blockchain firm Giga Watt has reportedly closed access and power to its facilities and stopped day-to-day operations, according to a note to clients reposted in a Telegram group on Jan. 15.

Following its bankruptcy filing in November 2018, the former top-five crypto mining firm reportedly notified its clients that any cryptocurrency remaining in customer wallets will be available for withdrawal until March via the Giga Watt dashboard.

As for mining equipment, Telegram user JP reposted in the customer support Telegram channel an email purportedly from the Giga Watt team, stating that users will receive an email notification within next two weeks with the tracking data for their shipments.

The United States-based company also warned in the reposted note that if an email is not received, it means that the user’s equipment will remain in the locked facilities and any further information relative to their equipment will not be known or available due to pending legal proceedings, which will determine the further information that can be disclosed to customers.

Until that time, the firm reportedly notes that there are only a few employees remaining at Giga Watt to date who can assist customers in their account withdrawals, know your customer (KYC) verifications, and other questions. According to Giga Watt’s Telegram group, some employees have not been paid since July 2018.

In a conclusion to the reposted note, the Giga Watt team committed to keeping their customers informed if they have any additional information or changes.

In mid-January, officials at Douglas County in the U.S. state of Washington — where Giga Watt allegedly owes $300,000 in utilities payments — started looking into using the former mining facilities for other computing-intensive applications like data analytics or artificial intelligence (AI).

Recently, major Chinese crypto mining and ASIC hardware supplier Bitmain was reported as halting mining operations in Rockdale, Texas. The company also reportedly had to lay off most employees, with the exception of two engineers and the director of human relations.

In late 2018, both Bitmain and major crypto exchange Huobi had reportedly confirmed plans to lay off staff as well. Some Chinese activists also suggested on local media outlets that Bitmain has had to dissolve its entire team of Bitcoin Cash (BCH) developers. Moreover, Bitmain broke the news in December that it was shutting down its development center in Israel and laying off local employees.


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Former top-five crypto mining firm has reportedly closed access and power to its facilities and shut down day-to-day operations