The chief executive officer (CEO) of Bitsonic, a major South Korean virtual currency exchange, has been sentenced to seven years in prison for his involvement in a fraudulent scheme totaling approximately 10 billion won. The verdict, handed down by the Seoul Eastern District Court, comes after a trial where the CEO and his vice president of technology were found guilty of manipulating market prices and siphoning customer deposits.
Meanwhile, this scandal highlights the risks associated with crypto exchanges and the importance of regulatory oversight in the industry.
Bitsonic CEO Faces 7-Year Jail Term For Fraudulent Activities
The Seoul Eastern District Court Criminal Agreement Division 12, led by Chief Judge Lee Jong-chae, delivered the verdict, sentencing Bitsonic CEO Shin to seven years in prison. Alongside him, Bitsonic’s vice president of technology, Bae, received a one-year prison term.
Notably, as per the report by the major South Korean news agency, Yonhap News Agency, the court found them guilty of fraud, forgery of records, and obstruction of business by computer, among other charges under the Punishment Act for Specific Economic Crimes.
The court’s ruling emphasized the exploitation of Bitsonic’s platform to inflate transaction volumes artificially, deceiving users into believing in the exchange’s legitimacy. More than 10 billion won was unlawfully obtained from numerous victims, severely undermining trust in virtual asset exchanges.
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A Closer Look Into The Fraudulent Scheme
Shin’s trial revealed a sophisticated scheme spanning from January 2019 to May 2021, wherein he manipulated trading volumes using Bitsonic’s funds to inflate the price of Bitsonic Coin (BSC), the exchange’s self-issued cryptocurrency. In addition, false Korean Won points were entered into the Bitsonic system, creating a facade of cash deposits that never occurred.
Meanwhile, under the guise of a legitimate operation, Shin exploited his position to defraud 101 coin investors, pocketing their cash and virtual assets amounting to approximately 10 billion won. Besides, Bae was complicit in the scheme, developing and deploying programs to facilitate Shin’s fraudulent activities within the transaction system.
Notably, the verdict serves as a stark reminder of the potential pitfalls in the cryptocurrency industry and the imperative for stringent regulations to safeguard investors’ interests. As authorities crack down on fraudulent activities, users are urged to exercise caution and conduct thorough due diligence before engaging with virtual asset exchanges.
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