South Korean Exchange CEO Sentenced to 16 Years in Prison

A South Korean district court has actually sentenced executives of a regional crypto exchange to prison. The CEO of the exchange got a 16-year prison sentence while other executives and their accomplices got in between 6 and 11 years. They fooled countless financiers, guaranteeing them up to 200% return within weeks.

Hefty Sentences for Crypto Exchange Executives

The Seoul Central District Court has actually apparently handed large prison sentences to executives of regional cryptocurrency exchange Coinup. Judge So Byeong-seok sentenced 53-year-old CEO Kang Seok-jung to 16 years in prison for dedicating scams under the Act on the Aggravated Punishment, etc. of Specific Economic Crimes. In addition, the exchange’s CFO was sentenced to 11 years in prison while other executives and their accomplices got in between 6 to 9 years each. The executives were detained in March on suspicion of financial investment scams.

South Korean Exchange CEO Sentenced to 16 Years in Prison

Coinup’s executives fooled about a thousand financiers from August in 2015 to February this year, regional media detailed, including that they gathered around 450 billion won (~$386 million) from them. Yonhap News explained:

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They stated that the worth of the cryptocurrency they pointed to would increase considerably, and they stated that if they invested in packaged items, they would pay up to 200% after 4 to 10 weeks.

South Korean Exchange CEO Sentenced to 16 Years in Prison
Coinup’s CEO detained.

The Scheme

The executives tempted individuals to invest in an unlisted cryptocurrency, persuading them that its worth will escalate when it is noted. However, the coin was never ever noted and financiers lost cash. Instead, the exchange paid early financiers with cash gathered from those who invested later on.

South Korean Exchange CEO Sentenced to 16 Years in Prison
One of Coinup’s financial investment workshops.

Investigations into the Ponzi plan exposed that, in order to mislead financiers, Kang showed a phony publication at the exchange’s workplace with an image of him standing next to South Korean President Moon Jae-in. The judge discussed:

They produced a possible look, consisting of a publication with a picture of the existing president. In light of the repercussions, the criminal activity is major.

However, the judge included that “the victims are also accountable for spreading out the damage by investing exceedingly in the idea of getting high earnings in a brief time.”

South Korean Exchange CEO Sentenced to 16 Years in Prison
Coinup’s phony publication including the CEO with South Korean President Moon Jae-in.

The South Korean crypto policy is going through modifications. The nation’s leading monetary regulator, the Financial Services Agency, has actually stated that it will tighten up oversight of the market in compliance with the requirements set by the Financial Action Task Force (FATF). In June, Yonhap News reported that the variety of crypto exchanges in South Korea had actually been increasing, keeping in mind that the variety of regional crypto exchanges stood at 205. The federal government presented the real-name system in January in 2015, efficiently prohibiting making use of confidential checking account in crypto deals in an effort to avoid cash laundering and other prohibited activities. However, banks have actually just been offering the real-name account service to the nation’s leading 4 crypto exchanges up until now.

Democratic Party Representative Je Youn-kyung has actually proposed a costs to tighten up online security guidelines for all cryptocurrency exchanges, however that costs is still pending in the National Assembly in addition to a variety of other crypto-related costs. Meanwhile, a South Korean governmental committee is promoting the federal government to develop the legal status for cryptocurrency for the nation to remain competitive worldwide.

What do you consider Coinup’s plan and the prison sentences the executives and their accomplices gotten? Let us understand in the comments area below.

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