The decrease in operations on its platform, as well as losses caused by computer errors, forces Coinnest to an unavoidable closure

On Tuesday, April 16th, the important South Korean exchanges company, Coinnest, announced, through a publication on its official website, that it will conduct a technical closure of all its operations as an asset rescue measure.

The announcement of Coinnest is a process that has already started. According to the official publication, this will take a while to materialize. In the document, the company detailed step by step the final actions for its official closure; this timeline was published in order to inform its creditors, customers and partners about the completion of their procedures. However, it is clear that it is an inevitable move that will allow the company to safeguard the assets of all its customers.

About the reasons why the company is going to close, it is known that a Coindesk Korean journalist interviewed a company executive, in order to know the main reasons. The executive answered that the decision is largely due to the sudden fall in the number of operations and the decrease in active clients. “It is a natural result of a decrease in the volume of operations. Both regulatory issues and commercial decisions have served as the basis for this decision”.

Coinnest was considered the third largest crypto-exchanges company in South Korea and reached the sixth position in the ranking of the best cryptocurrency exchange platforms in the Asian country, according to the reports  made last year by different media specialized in these technologies. Despite these achievements, the company began to suffer problems in its financial stability processes. This does not happen because of the fall of the cryptocurrency exchange market.

Kim Ik-hwan, who was one of the most important executives of Coinnest, was arrested last year, on suspicion of having carried out significant third-party fraud and embezzlement.

Sometime later, it was officially announced that Ik-hwan was found guilty of all the charges against him and sentenced to prison. He will pay a fine of approximately 3,000 million, approximately US $ 2.5 million.

Despite these links that may have negatively affected Coinnest’s finances, one of the executives of the company played a major role in this altercation and mentioned that the company lost much of its strength due to some mistakes that decreased them a lot of money.

About this aspect, he cited the example of a misplaced release last January, which ended up generating $ 5 million in losses. The problem was originated due to a computer error that processed the uncontrolled sending of cryptocurrencies to all of its clients.

Due to the difficulty that caused the loss of around 5.3 million dollars in full process of development of its own app, and the considerable decrease in the number of operations in its platform, it ended up unbalancing its financial status, which eventually forces Coinnest to this forced closure. The community is waiting for more news about it.

By María Victoria Rodríguez


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