- South Korean court has sentenced three individuals to prison terms ranging from 2.5 to 4.5 years for a 610 million won ($416,000) cryptocurrency investment fraud.
- The scammers promised investors access to “1,000 quality coins” and 30% monthly returns through an alleged proprietary trading algorithm.
- This case highlights South Korea‘s intensifying efforts to combat crypto-related crimes, including the establishment of a specialized Virtual Asset Crimes investigation unit.
Three individuals have been sentenced to prison by the Busan District Court for executing a cryptocurrency fraud scheme that defrauded investors of 610 million won (approximately $416,000). The perpetrators operated an illegal crypto investment company in June 2019, luring victims with false promises of substantial returns and access to premium digital assets.
The court handed down varying sentences reflecting the individuals’ roles in the scheme. The mastermind received the harshest punishment of four and a half years in prison, while two accomplices were sentenced to three and a half years and two years and six months, respectively.
According to evidence presented in court, the fraudsters enticed investors by claiming to facilitate trading across “1,000 quality coins from around the world.” They further promised an unrealistic 30% monthly return on investments, supposedly generated through a proprietary trading algorithm that capitalized on market fluctuations. Instead of investing the funds as promised, the perpetrators used investors’ money for personal expenses.
Presiding Judge Kim Yong-gyun condemned the defendants’ actions, stating: “Mr. A and others committed the crime by taking advantage of the victims’ lack of knowledge about coin investment,” and “the method and circumstances of the crime, such as deceiving investors by exchanging coins, are very poor.” These statements were reported by local South Korean media sources.
The case represents a growing trend in South Korea‘s approach to cryptocurrency regulation and enforcement. Legal experts note that this ruling signals authorities’ commitment to treating crypto fraud as a serious offense, with meaningful penalties for perpetrators.
South Korea has significantly strengthened its regulatory framework for digital assets in recent years. As part of this enhanced oversight, the country established the Joint Investigation Unit (JIU) for Virtual Asset Crimes, operated by the Seoul Southern District Prosecutors’ Office. This specialized unit is tasked with investigating and prosecuting cryptocurrency-related criminal activities.
The conviction comes amid broader efforts to protect investors in South Korea’s active cryptocurrency market, where authorities have been increasing scrutiny to maintain market integrity and safeguard participants from fraudulent schemes.
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