Bitsonic, a prominent cryptocurrency exchange, has been embroiled in a scandal resulting in severe legal consequences for its CEO and technology chief.
According to reports from South Korean media outlet Yonhap News Agency on Feb. 6, Jinwook Shin, the CEO, has been sentenced to seven years in prison, while the firm’s technology chief, identified only as Mr. A, received a one-year jail term.
Their charges stem from the misappropriation of 10 billion South Korean won ($7.5 million) worth of customer deposits.
The Seoul District Court found Shin guilty of various offenses including fraud, forging records, falsifying records, and obstructing business through computer-related means.
Similarly, Mr. A was convicted of obstructing business through computer activities.
The court emphasized the significant damage inflicted upon trust in crypto exchanges by their actions, noting their evasion of responsibility and lack of remorse.
Moreover, it highlighted the failure to recover a substantial portion of customer funds.
The court revealed that Shin had manipulated transaction volumes on Bitsonic between January 2019 and May 2021.
He utilized company funds to purchase Bitsonic’s token, artificially inflating its value.
READ MORE: Binance Launches $5 Million Bounty to Root Out Corrupt Staff Amidst Token Listing Controversy
Additionally, he falsified deposits by injecting counterfeit currency into the exchange’s system, creating a facade of legitimate transactions.
Mr. A further exacerbated the situation by developing a program that artificially inflated cryptocurrency prices on the exchange.
Furthermore, Shin disseminated false information by announcing a partnership with an international exchange, which contributed to the scheme’s unraveling.
As a result, investors were unable to withdraw their funds, leading to losses totaling $7.5 million.
Bitsonic ceased operations in August 2021, citing internal and external issues. However, this is not an isolated incident in the cryptocurrency realm.
On the same day, the Seoul Prosecutors Office arrested the CEO and two executives of Haru Invest, a crypto yield platform.
Allegations suggest they misappropriated 1.1 trillion won ($830 million) from 16,000 users, primarily through reinvestments between March 2020 and June 2023, resulting in suspended withdrawals for users.
Discover the Crypto Intelligence Blockchain Council
