Investors seized property and other others of the CEO of the Allstarbit cryptocurrency exchange. They took action as the exchange refused to return their investment.

It is the first time for the court to issue the property seizure order against the cryptocurrency exchange in South Korea.

The law firm, Gwanghwa, said it completed all asset seizure procedures last week by the court order.

Investors claimed that Allstarbit arbitrarily prevented investors from taking out cash from the exchange.

According to the law firm representing the investors, the exchange also manipulated prices. Allbitstar executives were suspected of misappropriating funds.

The exchange also faces allegation for the so-called atomic swaps, namely exchanging one coin into another without permission from investors. Investors also contended that the exchange manipulated the accounting.

The investors have seized the property as the exchange refused to answer their petition. The exchange declined to answer the content-certified mails the investors sent.

The problem occurred as Allstartbit could not open real-name accounts for investors. All investors must deposit their money in the Allstartbit corporate accounts. However, investors said they could not withdraw their money from the exchange account, and could not hear any convincing explanation for the exchange’s refusal.

The investors said they would file criminal and civil lawsuits against the exchange.

Lawyer Park Ju-hyun said, “The government should take action against many of the cryptocurrency exchanges, which are running like unlicensed gambling companies.”  He said hundreds, and tens of hundreds of investors became victims.

The government should set clear guidelines on the cryptocurrency exchanges, said Park, who is heading the IT crimes unit at the Korean Bar Association. The lawyer, urged the Financial Supervisory Commission, the Financial Supervisory Service, the prosecution and the police to uproot irregularities and unlawful acts many of the fraudulent exchanges commit.

However, the government does neither recognize the cryptocurrency exchanges nor cryptocurrencies. Thus, it is not the responsibility of the financial regulators to oversee the cryptocurrency exchanges, according to the government.

Only the police and the prosecution start investigation when they receive complaints from investors.