The CEO of Bitsonic, a South Korean cryptocurrency exchange, has been sentenced to seven years in prison for stealing $7.5 million worth of customer deposits and manipulating the crypto market.
The Technology chief of Bitsonic identified by Mr. A, was also sentenced to one year in jail for aiding and abetting the fraud.
According to a report by Yonhap News, the Seoul District Court found Jinwook Shin, the CEO of Bitsonic, guilty of fraud, forgery, falsification of records, and obstruction of business by computer.
The court said that Shin and his accomplice, identified only as Mr. A, had damaged the trust in crypto exchanges and showed no remorse for their actions.
The court said that Shin and Mr. A had devised a scheme to inflate the trading volume and price of Bitsonic’s token, BSC, by using the exchange’s funds and creating fake deposits.
They also posted a false announcement on Bitsonic’s website that the exchange had partnered with another international exchange.
But, the scheme collapsed when customers could not withdraw their funds and cryptocurrencies, as Shin had siphoned off $7.5 million from the exchange.
The court said that a significant amount of the stolen money had not been recovered.
Bitsonic, which was launched in 2018, had claimed to be one of the largest crypto exchanges in South Korea, with over 300,000 users and 100 trading pairs. However, the exchange shut down its operations in August 2021, citing “internal and external issues”.
Shin’s case is not the only one involving crypto fraud in South Korea.
On the same day, the Seoul Prosecutors Office arrested the CEO and two other executives of Haru Invest, a crypto yield platform, for allegedly stealing $830 million worth of crypto from 16,000 users.
South Korea has been cracking down on crypto-related crimes and tightening its regulations on crypto exchanges.
Civil investigations into other charges against Shin are ongoing and we should prepare for more crackdowns on crypto exchanges in the South Korea region.