Cryptocurrency exchange Coinbin has declared bankruptcy, causing financial damage estimated at 29.3 billion won (US$26 million).
"We are preparing to file for bankruptcy due to a rise in debt following an employee’s embezzlement," Park Chan-kyu, CEO of Coinbin, told reporters in its Seoul office on Feb. 20. As a result, all cryptocurrency and cash withdrawals from the exchange were halted at 3:00 p.m. on the day. Cryptocurrency and cash settlements would be done in accordance with bankruptcy procedures, Coinbin said.
Park asserted that an executive in charge of managing cryptocurrencies, who previously served as the CEO of Youbit, the predecessor of Coinbin, had committed dereliction of duty and embezzled company funds. The executive reportedly claimed that he had removed hundreds of cryptographic keys to coin wallets containing hundreds of Bitcoin and lost the cryptographic key to a wallet containing more than 100 Ethereum coins last November. But Park said that it was not a mistake but an intentional act in that the executive is a cryptocurrency expert. The amount of the damage is estimated at 29.3 billion won including 27 billion won to be used for compensation of some former members of Youbit and 2.3 billion won of lost coins.
Coinbin took over Youbit, a cryptocurrency exchange that suffered a hack of 17 billion won at the end of 2017. In April of the same year, Youbit succeeded Yapizon, which lost 5.5 billion won due to a hacking.