Reportedly, for plundering 10 billion South Korean won ($7.5 million) worth of customer deposits, the CEO of cryptocurrency exchange Bitsonic has received a seven-year prison sentence, the firm’s CTO also received a one-year sentence.
The Korean District Court imposed a seven-year prison sentence on Jinwook Shin, according to a February 6 report by the Yonhap News Agency of South Korea. His detention on August 7, 2023, brought him into custody on fraud charges, record forgery and falsification, and computer-based business obstruction.
Vice president of technology at Bitsonic, identified only as Mr. A, received a one-year sentence for computer-related business obstruction.
The court stated that Shin and Mr. A had “significantly harmed confidence” in cryptocurrency exchanges, adding that the two individuals were “avoidant of responsibility and apathetic.”
The company added that a “significant amount” of customer funds remained unrecovered.
The court stated that Shin manipulated transaction volume on the exchange between January 2019 and May 2021 by purchasing its token with Bitsonic’s funds, thereby inflating its price unduly.
Additionally, he fabricated won deposits into the exchange’s system to appear as though he had deposited currency. Further, Mr. A developed a program that acquired Shin’s cryptocurrency to exaggerate exchange prices.
Shin fraudulently announced on Bitsonic that it had partnered with an additional international exchange.
When investors could not withdraw their cash and cryptocurrencies, the scheme imploded due to Shin’s misappropriation of $7.5 million in client funds.
In August 2021, Bitsonic ceased operations, attributing the closure to “internal and external issues.”
In the interim, the CEO and two other executives of the cryptocurrency yield platform Haru Invest, which halted withdrawals in June 2023, were detained by the Seoul Prosecutors Office on February 6.
According to prosecutors, the three individuals misappropriated 1.1 trillion won ($830 million) worth of cryptocurrency from 16,000 users between March 2020 and June 2023 by reinvesting the majority of the funds.