Key takeaways:
- The head of Bitsonic’s technical department received a one-year sentence for stealing customer deposits worth $7.5M, while the CEO was given a seven-year prison term.
- On a charge of using a computer to impede a business, Bitsonic’s vice president of technology, identified only as Mr. A, received a one-year jail sentence.
The head of Bitsonic’s technical department received a one-year sentence for stealing customer deposits worth $7.5 million (10 billion South Korean Won), while the CEO of the cryptocurrency exchange was reportedly given a seven-year prison term.
Seoul District Court sentenced CEO Jinwook Shin to seven years in prison, according to a report published by Yonhap News, a South Korean media site, on February 6. On August 7, 2023, he was taken into custody and accused of fraud, document forgery and falsification, and computer-based business obstruction.
On a charge of using a computer to impede a business, Bitsonic’s vice president of technology, identified only as Mr. A, received a one-year jail sentence.
The court stated that Shin and Mr. A were dodging accountability and displaying no remorse, which had severely undermined public trust in cryptocurrency exchanges. It also stated that a “significant amount” of lost client money had not been found.
The court said that Shin used Bitsonic’s assets to purchase the exchange’s own token, falsely raising its price, and so manipulating transaction volume on the platform between January 2019 and May 2021.
In order to provide the impression that he had deposited cash, he also inserted fictitious South Korean Won into the exchange’s computer system. Additionally, Mr. A developed a program that bought Shin’s bitcoin holdings in an effort to drive up exchange prices.
Shin also claimed to have cooperated with another foreign exchange in a fictitious Bitsonic notification. When investors were unable to withdraw their money and cryptocurrency while Shin embezzled $7.5 million in client funds, the plan came crashing down.
In August 2021, Bitsonic announced that the company was closing due to internal and external problems.
The CEO and two other executives of the cryptocurrency yield platform Haru Invest, which stopped accepting withdrawals in June of last year, were detained by Seoul’s Prosecutors Office on February 6.
The three were accused by prosecutors of robbing 16,000 customers of $830 million (1.1 trillion Korean won) in cryptocurrency, with the majority of the proceeds being misappropriated through reinvestment between March 2020 and June 2023.
