Bitsonic CEO faces 7-year prison term for $7.5M fraud

  • Bitsonic’s CEO and vice president of technology received prison terms for their involvement in a fraudulent cryptocurrency scam, with the CEO facing a seven-year sentence.
  • The scam involved deceitful market manipulation and embezzlement of client funds, leading to the illegal acquisition of over 10 billion Korean won ($7.5M).

Bitsonic’s CEO, Shin, along with vice president of technology, Bae, were both given prison terms for their roles in a scam.

Bitsonic CEO faces prison term

The CEO of Bitsonic, a cryptocurrency exchange based in South Korea, was sentenced to seven years in prison for deceitfully controlling markets and embezzling client money. Shin was found guilty by the Seoul Eastern District Court along with the vice president of the platform’s technology, who was given a one-year term. 

Chief Judge Lee Jong-chae of the Criminal Agreement Division made the ruling, which represents a firm stand against corporate fraud in the bitcoin industry. Bae has received a one-year sentence, while CEO Shin faces a harsh seven-year prison term.

However, according to Seoul District Court Lee Jong-chae, Shin had “reached an agreement with two of the victims who suffered the largest amount of damages,” therefore he had been lenient with the sentencing.

Based on case files, Bitsonic illegally obtained over 10 billion Korean won ($7.5 million) by deceiving consumers via artificially inflating trade volumes. The plan, which ran from January 2019 to May 2021, involved inflating the value of Bitsonic Coin (BSC), the company’s native token, by leveraging exchange capital. 

Additionally, fictitious monetary deposits were made into Bitsonic’s to give the impression that the transactions were legitimate. Shin orchestrated a manipulation of the market by taking advantage of the credibility of the exchange.

Also read: Nikola founder Trevor Milton sentenced to four years: Tech fraud is harming security

Bitsonic case spurs call

Although the court’s decisive indication provides reassurance, rebuilding trust requires regulators to enforce rigorous monitoring systems and standards of accountability. In September 2021, South Korea enacted a regulation that mandates that all cryptocurrency exchanges in South Korea get an operating authorisation. The crypto market may need more regulations.

Sylvia-Shen

Sylvia Shen

Sylvia Shen, a news reporter at BTW media dedicated in Fintech and Blockchain. She graduated from University of California, Davis. Send tips to s.shen@btw.media.

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