[Parker] Disappearance of Coinzest
[Parker’s Crypto Story] It's been over a year since cryptocurrency exchange Coinzest halted its currency withdrawal service. When Coinzest was founded in 2018, it received public attention as HanbitSoft and Moda had invested in it. Since then, Coinzest established a strong presence in coin market by opening mining exchanges, just like Coz. In its heyday, Coinzest ranked top among Korean cryptocurrency exchanges based on one-day trading volume. However, as its mining exchanges were not sustainable, Coinzest announced a halt of withdrawals in Aug. 2019. Coinzest last August announced its downsizing plan and currently only the exchange's online customer center is available. What do Coinzest users think about this situation? We met a victim who is currently involved in a group lawsuit against Coinzest and his lawyer to listen their thoughts. #Coinzest issued users promissory notes? According to the victim, Coinzest issued promissory notes. With the controversy about its halt of won withdrawals, Coinzest cajoled users to take promissory notes. A promissory note is a written promise to pay a stated sum to a specified person or the bearer at a specified date or on demand. In other words, a holder of a promissory note cannot take any legal action on the debtor for a certain period of time according to the details of the note. Victims argue that Coinzest intentionally made them take promissory notes. Lawyer Jang Min-ah who is in charge of the group lawsuit said victims were preparing the lawsuit starting from April, and others who received promissory notes during the time were excluded. However, according to the victims, others are ready to file lawsuits. #Withdrawals from wallets? The victim also argued that transactions were made after Coinzest halted its withdrawal service. Coinzest stopped its withdrawal service for won and big cryptocurrencies, such as bitcoin and Ethereum, which means that there shoudn't be any record of withdrawals. However, in a wallet address a victim presented, we were able to confirm that withdrawals have been made after the exchange announced its halt of the withdrawal service. #“HanbitSoft is also responsible…They collected $50 million through ICO” The victim emphasized that HanbitSoft is also responsible for the situation. "According to Coinzest’s quarterly report, as of end of 2018, the company is reported to be worth about 19.1 billion won. As the company blocked any withdrawals since June 2019, I wonder where the 19.1 billion of assets and user money went." the accuser said. "If Coinzest allocates our money to its investors including HabitSoft, it is considered to be an act of embezzlement." When HanbitSoft prepared for public initial coin offering (ICO) for its bryllite, it secured $50 million of funding. Regarding this, the victim said, "After Coinzest halted its withdrawal service, transactions of bryllite were unavailable. People who trusted HanbitSoft and purchased bryllite in Coinzest couldn't do anything until the price of bryllite fell to 7 won." Bryllite's ICO price was about 200 won, which means that it declined about 97 percent. The victim emphasized that HanbitSoft should take responsibility for the current situation. HanbitSoft last December sold all of its shares of Bryllite, a Hong Kong subsidiary of HanbitSoft, as well as Coinzest.