South Korean Crypto Exchange Bitsonic Executives Sentenced for Price Manipulation
A South Korean court has sentenced the CEO and CTO of crypto exchange Bitsonic for manipulating crypto prices and making a profit of $7.5 million. The CEO, Shin Jin-wook, was given a seven-year prison sentence for fraud and falsifying official documents, while the CTO, surnamed Bae, received a one-year sentence for lesser charges. The defendants have the option to appeal the verdict and sentencing at higher courts. The judge stated that he had been lenient with the sentencing due to an agreement reached between Shin and two of the victims. The court heard that Bitsonic deceived investors into risky investments by creating computer programs that simulated a legitimate exchange and manipulated altcoin prices.
Manipulative Practices and Fraudulent Operation
The Bitsonic executives began their fraudulent activities in February 2019 by tricking investors into thinking they were participating in a genuine crypto exchange. They developed sophisticated software that allowed them to manipulate the prices of self-issued altcoins by automatically trading Bitsonic coins. However, all these purchases were made using wallets owned by Shin. In addition, Shin created a fictitious company that produced inflated sales and profit data for Bitsonic. As a result, 101 investors sent their fiat and crypto holdings to the exchange, with Shin keeping the majority of these deposits.
Legal Requirements for Crypto Exchanges in South Korea
Since September 2021, South Korean crypto exchanges must obtain an operating permit under new regulations. Trading platforms offering fiat on/off ramp services are also required to partner with domestic banks that offer verified trading using social security numbers. These measures aim to enhance transparency and protect investors in the crypto industry.
Hot Take: Accountability for Crypto Fraud
A Seoul court has delivered a significant sentence to the executives of Bitsonic, a South Korean crypto exchange, for their involvement in price manipulation and fraud. The CEO, Shin Jin-wook, received a seven-year prison term, while the CTO, surnamed Bae, was sentenced to one year. The court found that the defendants deceived investors by creating software that simulated a legitimate exchange and manipulated altcoin prices. This case highlights the importance of regulatory measures and legal enforcement to combat fraudulent activities in the crypto industry. It also serves as a reminder for investors to exercise caution and conduct thorough due diligence before engaging with any crypto platform.
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