Coinbin declares bankruptcy facing heavy losses on fund misappropriation

Posted 25 February, 2019

South Korean crypto exchange Coinbin (the successor of hacked Youbit) has reportedly filed for bankruptcy after it suffered material damage in the amount of $26 million.

According to the available information, Coinbin CEO Park Chan-kyu declared bankruptcy on February 20. For now, the platform has suspended all payments in cryptos and might be carried out later according to the procedures provided by law. The company has posted the notice on its website saying that they were forced to stop all activities. It was stated that soaring expenses  entailed dramatic increase in the debts  "due to the increase in debt, the increase in the labor cost".

Park commented that one of the company’s employees that used to be CEO at Youbit ignored his duties and fiddled Coinbin's funds. Moreover, the company still has to repay customers affected by the Youbit hack.

The company management explained:

"We were unable to overcome the loss caused by corporate executive moral hazard, government regulation, and increased debt, and eventually went bankrupt."

For reference, the Youbit faced several hacks in 2017 (April and December). After that, it was forced to leave the market and shut down business. The platform declared bankruptcy just after the second hack. Afterwards, it merged with Coinbin. Notably, Youbit received insurance policy before the bankruptcy, which made the community believe that it could go into an insurance fraud scheme.

According to Park, this malicious employee claimed that he deleted keys for cold wallets where were hundreds of Bitcoins and lost access to a wallet that contained more than 100 ETH. Park insists that this felony was carried out deliberately in order to steal the exchange’s assets and cannot be a mistake.

The platform also warned its users:

"Please do not deposit all passwords after today, and we will not be responsible for the deposit."

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25 February, 2019 15:13

← Bitfinex gets back 27 BTC stolen back in 2016

On Monday, Bitfinex crypto exchange reported that the US government has returned it some 27,66270285 BTC which were stolen after the hack back in August 2016 and later were discovered and seized by US law enforcement officers. That time Bitfinex lost 120,000 BTC in total ($72 million at the exchange rate at a point in time).

Bitfinex gets back 27 BTC stolen back in 2016

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25 February, 2019 13:21

Huobi Global takes over its Australian division →

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