South Korean Crypto Exchange CEO Lands 22 Years Imprisonment for $1.7B Fraud

South Korean authorities have found seven executive employees of the now-defunct local crypto exchange V Global, guilty of a 2 trillion won ($1.7 billion) crypto fraud.

According to a recent Forkast report, the executives are to serve lengthy jail terms and pay fines for engaging in such fraudulent acts.

Victims Deceived Into Making Investments

According to the report, investors were required to deposit a minimum of 6 million won ($5,000) into V Global. V Global then guaranteed a 300% profit for their deposit and promised to give 18 million V Cash (its self-issued crypto token) in return.

The exchange promoted the idea that V Cash would appreciate. As a result, investors looked forward to having great profits from their investments. Unknown to investors, the exchange was running a pyramid scheme-like operation.

For instance, it vowed to give 1.2 million won, or ($1,000) commission, to anyone who referred new customers to them. Although some investors were said to have received a portion of the promised return, prosecutors argued that those funds had been taken from the deposits of newer customers.

Court Ruling

Several victims of the scheme sued V Global in 2021, while prosecutors demanded a life-imprisonment sentence for the offenders. However, today’s court rulings specified milder terms.

As the mastermind behind the fraudulent scheme, V Global CEO Lee Byung-gul was handed a 22-year prison sentence. Additionally, the CEO will pay a 106.4 billion won ($89 million) fine.

The remaining six who were accomplices in the fraud received shorter prison sentences ranging from four to fourteen years. They are to pay fines ranging from 2.3 billion won to 106.4 billion won (approximately $2 million to $89 million respectively), depending on their degree of involvement in the fraudulent scheme.

Prosecutors not Satisfied With Court’s Verdict

Han Sang-jun, the lawyer who represented V Global scam victims in court stated that the prison sentences accorded to the fraudsters are insufficient compared to the damages caused. Per the report, about 52,419 investors lost their funds to the exchange, some of them their whole life savings.

“Most of the victims were middle-aged or senior citizens who dreamed of a stable life after retirement,” Han added.

He further alleged that at least one of the victims had taken their own life after losing funds to the V Global scheme.

Notably, cryptocurrency scams are on the increase in recent times. Luckily, some of the scammers have received punishments from the appropriate authorities.

Last year, an Abu Dhabi court sentenced nine men to 10-year jail terms for defrauding unsuspecting investors of Dh18 million ($4.9 million) via a cryptocurrency-linked get-rich-quick scheme.

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