South Korean crypto CEO gets 3-year prison term in market manipulation case: report
A South Korean court sentenced a local crypto asset management firm CEO to three years in prison for manipulating token prices to earn 7.1 billion Korean won ($4.88 million).
On Wednesday, the Seoul Southern District Court sentenced Jong-hwan Lee for violating the Virtual Asset User Protection Act, according to a Hankyung report.
In addition to the prison term, the court imposed a 500 million won ($343,939) fine and ordered the forfeiture of approximately 846 million won ($581,963) in criminal proceeds. However, the court decided not to take Lee into custody in court, citing good behavior throughout the trial.
Between July 22 and Oct. 25, 2024, Lee used an automated trading program to inflate trading volumes and repeatedly place wash trade orders to manipulate the price of ACE cryptocurrency, allegedly making 7.1 billion won in illicit gains.
The daily average trading volume of the cryptocurrency in question was around 160,000 units the day before Lee started using the program. According to the report, volume surged to 2.45 million units the following day, with investigators finding that Lee accounted for 89% of the trading activity.
"This is a serious crime that obstructs the fair price formation of the virtual asset market and undermines investor trust," the court said in the translated news report. "A strict sentence is necessary as he has failed to realize the severity of his actions or show remorse."
Min-cheol Kang, a former employee of the firm that was indicted on the same charges, was sentenced to two years in prison with three years of probation.
While the court found the defendants guilty of conspiring to manipulate the cryptocurrency's price for unfair profits, it issued a partial acquittal regarding the 7.1 billion won figure, citing insufficient evidence from the prosecution.
This case holds significance as the first violation of South Korea's Virtual Asset User Protection Act, which took effect in July 2024. South Korean lawmakers are currently working on a follow-up legislation named the Digital Asset Basic Act, which is expected to set various boundaries for the crypto industry, such as regulations on stablecoins and initial coin offerings.
Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.
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