A Seoul court has delivered a severe blow to the cryptocurrency exchange Bitsonic. As per the ruling, Bitsonic’s CEO Jinwook Shin is sentenced to seven years in prison and the technology vice president to one year behind bars. Shin was previously arrested in August 2023.
- Bitsonic CEO receives a 7-year jail term, while the technology vice president gets a 1-year sentence.
- The court ruled that the exchange involved market manipulation, fake deposits, and false partnerships.
- Seoul court condemns Bitsonic’s exploitation of its credibility and investor trust.
The executives have been charged with stealing 10 billion South Korean won ($7.5 million) worth of customer deposits. The verdict is a major setback for Bitsonic and highlights the challenges of regulatory compliance and consumer protection in the crypto space.
Bitsonic Executives Hurt Investor Trust on Crypto Platforms
The Seoul Eastern District Court found Bitsonic’s CEO, Jinwook Shin, and the firm’s technology vice president, known as Mr. A guilty of fraudulent market manipulation and misappropriation of customer funds.
The scheme involved artificially inflating trading volumes and prices of Bitsonic Coin (BSC), the exchange’s native token, between January 2019 and May 2021. Fake cash deposits and a false partnership announcement further deceived users. Therefore, resulting in substantial financial losses for customers.
As per the details, Shin deposited fake Won into Bitsonic to falsely show deposits. Moreover, Mr. A made a fake program to purchase Shin’s crypto assets and artificially inflate prices. to make it appear that he had deposited cash.
Furthermore, Shin posted a fake announcement on Bitsonic about partnering with another international exchange. In the end, investors were unable to withdraw their cash and crypto, as Shin stole $7.5 million from them.
The court condemned Bitsonic’s blatant exploitation of its credibility. As a result, it damaged the trust of investors in cryptocurrency trading platforms. The verdict shows the need for stricter oversight and accountability standards to prevent exchange malpractice.
Bitsonic’s closure in August 2021, citing “internal and external issues,” further highlights the consequences of inadequate regulatory scrutiny in the crypto industry. Similar incidents in the crypto industry have caused a hindrance to global crypto adoption.
Crypto Exchanges Need to Improve Their Security
In another development after Bitsonic, the Seoul Prosecutors Office arrested the CEO and two other executives of crypto yield platform Haru Invest. They were arrested for the alleged theft of $830 million worth of crypto from 16,000 users.
Haru Invest suspended withdrawals in June 2023 after mismanaging user funds for more than three years. The sentencing of Bitsonic executives and the arrest of Haru Invest executives highlight the urgent need for stricter accountability in the cryptocurrency industry.
In today’s crypto world, exchanges must prioritize transparency and security compliance to prevent fraud and protect investors. The incidents serve as a stark reminder of the risks associated with investing in cryptocurrencies.