[Parker] Users complain that Coinone has changed
[Parker’s Crypto Story] In an interview with Join.D exactly a year ago, Coineone CEO Cha Myung-hoon said the main questions regarding his business were about building “a cryptocurrency exchange that benefits the ecosystem and its investors.” “Coinone launched when bitcoin prices were hovering around 200,000 won. We believe in the vision of blockchain, and our efforts are irrelevant to coin prices. We won’t be satisfied just because the market situation got better. We want our investors to be satisfied with and believe in Coinone’s value,” he said at the end of interview. A year has passed, but Coinone seems to be sailing in a different direction from Cha’s words. #The problem with new crypto currency This year, new cryptocurrencies started being traded on Coinone. If they were listed out of pure intentions, Coinone wouldn't have been criticized by the crypto community as it is now. The problem was that the listings got excessive. One of them is RNX, issued in April. RNX was originally listed and traded on another crypto exchange, Cashierest. With Coinone having joined in, RNX is now traded on two exchanges. But after Coinone announced that RNX deposits would be made possible on April 23 at 10 am, Cashierest suddenly blocked RNX withdrawals from 10:02 am, citing “contract upgrade and security enforcement.” RNX prices suddenly started to plummet. Coinone didn’t have RNX deposits after the first few minutes, which created an ideal environment to rig the market. As a result, RNX’s price on Coinone rocketed to 541 won—up ninefold compared to the 60-won level of the previous trading day. #Coinone’s side of the story Coinone has so far maintained a cut-clean image among local crypto exchanges, which all the more makes it difficult to understand its recent change. Coinone refused Join.D’s interview request. CEO Cha did not respond either. One could make wild guesses. Until recently, Coinone was embroiled in a 27 billion won lawsuit against former parent company Yellow Mobile. Yellow Mobile is Korea’s second unicorn and an association of mobile ventures. The company had rapidly expanded in size by merging with more than 140 startups and mid-sized companies. After reaching unicorn status in 2014, defined as worth 1 trillion won in corporate value, Yellow made aggressive moves to boost this figure to 4 trillion won in the following year. But Yellow’s financial situation rapidly got bad, which led to Coinone suing. The crypto exchange won the case in May, but the company still owes it 6.4 billion won, which is unlikely to be paid in the near future. #Building trust takes time but losing it can happen in a second One scenario is that Coinone judged it’s no longer able to do business as normal. Since June, Coinone has been called the “go-to pumping” exchange, for all the wrong reasons. Suspicious attempts to rig prices have been happening at the crypto exchange, which in the past was relatively free of such accusations compared to other local exchanges. There are no barriers to coin offerings. But Coinone is one of the largest in the industry and is therefore close to being a standard of trust. Protecting user information and assets is a core task at central crypto exchanges. The service has already started losing trust in that perspective. We hope Coinone finds an answer to overcome this situation and maintain what remains of its credibility.