South Korean Authorities Arrest Crypto Exchange Chief on Suspected Multi-Million Dollar Fraud Charges

Jinwook Shin, CEO of cryptocurrency exchange Bitsonic, has been apprehended by South Korean law enforcement on August 7th. He is currently being investigated for allegedly embezzling investments and deposits from users of the exchange.

According to the report by South Korean news agency Chosun Biz, Shin is being accused of fraudulently manipulating cryptocurrency prices and trading volume on Bitsonic, which led to the misappropriation of approximately 10 billion won ($7.5 million) from exchange users from January 2019 to May 2021.

  • The prosecution stated that Shin operated Bitsonic but did not purchase cryptocurrency during the same period.
  • But the CEO persisted in providing cryptocurrencies to new customers despite the onset of liquidity problems and the suspension of withdrawals on the crypto platform, Seoul’s cyber crime department alleged.
  • BitSonic announced shutting down its operations in August 2021 and attributed the decision to “internal and external issues.”
  • Shortly thereafter, the South Korean authorities closed down 11 domestic cryptocurrency platforms for alleged fraudulent activities.
  • The ensuing inquiry also claimed the involvement of the company’s vice president in orchestrating a scheme to acquire the crypto held by the CEO within the exchange system.
  • In the process of manipulation, Shin purportedly utilized a shell company established in Singapore.
  • Meanwhile, the vice president of Bitsonic is also slated to face trial without being subject to preliminary detention.
  • Off late, South Korean authoritoes have taken a hardline approach against fraudulent activities within the digital asset industry.
  • Last month, Korea Securities Depository unveiled a partnership with Code, a firm specializing in Travel Rules, to promote the issuance and utilization of Legal Entity Identifiers (LEI) within the virtual asset market.
  • This initiative seeks to tackle the surge in unlawful activities within the market while also fulfilling the demand for enhanced investor safeguard.
  • Besides, the Korean government was reportedly building a crypto-tracking system to prevent cybercrime.

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