Bitsonic CEO Faces 7-Year Sentence Following Conviction for Cryptocurrency Theft in South Korea
In a landmark ruling, the Seoul Eastern District Court has sentenced Jinwook Shin, the CEO of the cryptocurrency exchange Bitsonic, to seven years in prison for embezzling approximately 10 billion won ($7.5 million) from customer deposits. The court also handed down a one-year sentence to Bitsonic’s Vice President of Technology, known only as Mr. A, for his role in the crime.
Background of Bitsonic
Bitsonic is a cryptocurrency exchange based in South Korea, known for its unique approach to sharing trading fee revenue with holders of its native exchange coin, BSC. This feature allows investors to stake or unlock certain benefits within the platform. The exchange provides a platform for trading a variety of cryptocurrencies and is recognized for its user-friendly interface and trading options.However, the exchange has now become infamous for the criminal activities of its executives.
Details of the Crypto Theft
Between January 2019 and May 2021, Shin used the exchange’s assets to purchase its own token, Bitsonic Coin, thereby artificially inflating its price. This manipulation deceived users into believing there was genuine trading activity and growth in the value of the token.
Shin also made false announcements about partnerships to attract investors and entered fake cash deposits into Bitsonic’s system to create the illusion of higher liquidity and trading volumes. These actions were facilitated by a computer program created and operated by Bitsonic’s Vice President of Technology, known as Mr. A, who was also convicted for his role in the scheme.
Legal Proceedings and Sentencing
Shin was arrested in early August and faced charges of fraud, forgery, and obstruction of business by computer. Mr. A was indicted on charges of obstruction of business by computer. The court’s decision reflects a lack of remorse from the defendants and the fact that a significant amount of the stolen funds has not been recovered.
Impact on Customers and the Crypto Community
The theft has greatly damaged trust in crypto exchanges, particularly as the Bitsonic executives showed no remorse and a significant amount of customer funds had not been recovered. The fact that Shin continued to offer cryptocurrency to new clients even after Bitsonic halted withdrawals further fueled feelings of anger and distrust.
The theft has had a profound impact on Bitsonic’s customers, many of whom have lost substantial sums of money. The broader crypto community in South Korea has also been affected, as this case adds to a series of scandals that have eroded public trust in cryptocurrency exchanges. In response to such incidents, South Korea is tightening regulations on cryptocurrency, with the Financial Services Commission announcing that crypto criminals could face life sentences under new laws taking effect in July.
The Bitsonic case is a stark reminder of the risks associated with cryptocurrency exchanges and the importance of robust legal frameworks to protect investors in this rapidly evolving market.
Angel Marinov is the Managing Editor at Coinlabz. With extensive knowledge of crypto payments and blockchain use cases, Angel is a trusted source of accurate and timely information