The CEO of crypto exchange Bitsonic has reportedly been sentenced to seven years in prison, while the firm’s technology chief was sentenced to one year in jail for stealing 10 billion South Korean won ($7.5 million) worth of customer deposits.
On Feb. 6, South Korean media outlet Yonhap News Agency reported that the Seoul District Court sentenced Jinwook Shin to seven years in prison. He was arrested on Aug. 7, 2023, and charged with fraud, forging and falsifying records and obstructing a business via computer.
Bitsonic’s vice president of technology — reported only as Mr. A — was sentenced to one year in jail on a charge of obstructing a business via computer.
The court said trust in crypto exchanges “has been greatly damaged” by Shin and Mr. A, adding that the pair were “avoiding responsibility and showing no remorse.”
It added a “significant amount” of customer funds had not been recovered.
The court said that between January 2019 and May 2021, Shin manipulated transaction volume on the exchange by using Bitsonic’s funds to buy its own token, artificially inflating its price.
He also deposited fake won into the exchange’s system to make it appear that he had deposited cash. Mr. A also created a program that purchased the cryptocurrency held by Shin to inflate prices on the exchange.
Related: South Korea’s top office urges FSC to revisit stance on spot Bitcoin ETFs
Shin also posted a fake notice on Bitsonic that it had partnered with another international exchange.
The scheme collapsed when investors could not withdraw their cash and crypto, as Shin siphoned $7.5 million in customer funds.
Bitsonic closed operations in August 2021, claiming it had “internal and external issues.”
Meanwhile, on Feb. 6, the Seoul Prosecutors Office arrested the CEO and two other executives of the crypto yield platform Haru Invest, which suspended withdrawals in June 2023.
Prosecutors alleged the trio stole 1.1 trillion won ($830 million) worth of crypto from 16,000 users, misappropriating most of the funds by reinvesting them between March 2020 and June 2023.
Asia Express: OKX token’s $6.5B flash crash, crypto exec ‘Mr Bang’ on the run