Korean Crypto Exchange Cashierest in Trouble for Shady Price Pumping for Token Issuance
A Korean Cryptocurrency Exchange Platform in Trouble for Controversial Price-Pumping Token Schemes
It is an open secret that the mutual exchange of tokens is slowly but surely becoming a highly lucrative venture. And this has seen the sporadic emergence of all manner of trading ‘strategies' in a bid to take advantage of this newly-found wealth. However, this has also led to a few allegations of unfair play stemming from some of the key players of the market. The latest is a lawsuit that has been leveled against a South Korean crypto-exchanger that emanates from its price-pumping token schemes especially those revolving around its issuance policy
According to the accuser – a firm by the name Aone – Newlink Co. Limited (the owners of Cashierest ) allegedly attempted to deviate from the from the pre-agreed public interest in a bid to resuscitate the health of the crypto market. One of Aone's leading lawyers, Kim Dongjoo, explained to the local media that their firm is pursuing charges against the owners of Cashierest for what he termed as ‘Cage Pumping.'
The so-called ‘cage-pumping' refers to a situation where the major players work in cahoots with an exchange platform to artificially induce the price of the tokens while at the same time illegally restricting the liquidation of the cryptocurrency. This is mostly done to revive the ailing health of a given currency.
Going by the lawsuit – as reported by leading local media outlets – Cashierest is alleged to have committed illegal issuance of its principal dividend coin (CAP) without following the laid-out regulations as directed by the capital market. To be more specific, it is an infringement of Article 119 of the Korean Capital Markets Act.
And that's not all. They are also said to have violated Article 178 of the same act by aiding and abetting unfair trading. All in all, the lawsuit is mainly centered on the unfair pumping of the prices of its tokens. Interestingly, this is not solely exclusive to Cashierest. The law firm plans to extend the net to other key exchanges such as Coinbit, Bithumb, and Coinzest.
Referral Mining, Trade Mining, And Dividends
The lawsuit revolves around CAP – which is one of the exchange's tokens. The token has three significant features; trade mining, dividends, and referral mining. Going by the token's whitepaper, holders of CAP are entitled to 100% of the profits netted from the operation of Cashierest exchanges. What's more, the whitepaper further narrates that it will pay the first phase of the token's dividends (not in fiat) but KRW. Finally, the trading mining clause states that any transaction fees incurred are 100% refundable. And here's the root of the controversy. The policy has been termed by many as being unclear and even a possible scam by key figures of the market such as Binance's CEO, one Mr. Changpen Zhao.