Shin Jin-wook, the CEO of South Korean crypto exchange Bitsonic, received a second jail term for another serious fraud case.
Already having been sentenced to seven years on charges of embezzling 10 billion won ($7.5 million) of customer deposits, Shin now also faces legal charges for his participation in Bitsonic Coin (BSC) manipulation.
The Daegu District Court has found Shin guilty of defrauding investors by using market manipulation tactics and false reports exaggerating BSC’s volume and trading value.
The judge declared that Shin’s actions directly caused financial loss to customers, adding to South Korea’s increasing crackdown on crypto malpractice.
Overview of the BSC Scam: Market Manipulation and Investor Deception
The court ruling uncovered that Shin was involved in a plot to manipulate the price and trading volumes of Bitsonic Coin.
By sending false public statements and manipulating internal trading figures, he deceived investors into purchasing BSC under false pretenses.
Shin used points from Korean won that he accrued through imagined buyback arrangements to buy Bitcoin (BTC) and Ethereum (ETH) from customers. He afterwards sold the virtual currencies for money and employed them to fund unrelated ventures.
Moreover, Shin gave misrepresentations about the lockup period for the investments, leading customers to anticipate returns that never materialized.
The total loss of the case was 160 million won ($115,000), and Shin pleaded guilty and expressed remorse at sentencing.
Also Read: South Korean Lawmakers Demand Probe into $29.7 Bln “KOK” Crypto Fraud
Precedent Leniency and the Judicial Rationalisation
This new sentence is a continuation of a previous judgment in February 2024, when Shin and Bitsonic’s Chief Technology Officer, whose name is only Bae, was sentenced for a combined eight years for manipulating crypto prices.
Then, the court handed down what was called a “lenient” verdict due to mitigating factors, including Shin’s admissions to major victims and lack of previous criminal records.
Judge Seong Gi-jun identified Shin’s admission to the crime, and that sentencing took into account the type of offense and motivation.
But stacking charges has now started to reveal a broader image of systemic dishonesty at the Bitsonic company and can influence the disposition of future appeals or related investigations.
Also Read: South Korea’s Central Bank Announces Cryptoassets Department Amid Growing Number of Crypto Users
Haru Invest CEO Cleared in Contrasting Court Ruling
While Shin is faced with additional time in jail, a major crypto case in South Korea similarly yielded a dramatic twist. On June 17th, Lee Hyung-soo, the CEO of Haru Invest, was acquitted of over $1 billion in alleged crypto fraud.
The court in South Korea ruled that the freeze on the company’s withdrawals, triggered following the FTX collapse, was due to external market shocks rather than intentional bad faith.
Consequently, criminal charges were vacated. However, civil suits against Haru Invest remain pending because the company is undergoing bankruptcy processes and aims to repay its investors.
The different legal outcomes of the Bitsonic and Haru cases depict the complexity of pursuing financial crimes in the emerging digital assets space.
Also Read: South Korean Court Sentences Two Individuals for Operating USDT-Based Crypto Laundering Scheme
South Korea’s Intensifying Crackdown on Crypto Crime
Shin Jin-wook’s imprisonment brings into sharper focus the general clampdown on crypto fraud and financial misconduct in the digital asset industry.
Also, earlier this year, on March 5, the FIU introduced stricter anti-money laundering measures against crypto platforms and transactions.
They are part of an effort across the nation that boosts control, detects criminality, and protects investors.
As high-profile cases of fraud gain public and regulatory notice, South Korea is at the forefront of leading global regulation of crypto, telegraphing a zero-tolerance policy on financial crime in the Web3 age.