Bitsonic CEO Gets Seven-Year Jail Term, Haru Invest Executives Arrested for Crypto Fraud
Summary:
The CEO of Bitsonic, a cryptocurrency exchange, has been sentenced to seven years in prison for misappropriating $7.5 million of customer deposits. The tech chief also received a one-year jail term for disrupting business activities. A substantial amount of customer funds remains missing following manipulation by the CEO between January 2019 and May 2021. Bitsonic ceased operations in August 2021 amid internal and external tribulations. Concurrently, Seoul Prosecutors also arrested the CEO and two executives of crypto yield platform Haru Invest for allegedly stealing $830 million in crypto from 16,000 users.
In a recent development, the CEO of cryptocurrency exchange Bitsonic, Jinwook Shin, has been handed a seven-year jail term, while the head of technology at the firm will serve a year in prison for misappropriating customer deposits amounting to $7.5 million (10 billion South Korean Won). This news was broken by Yonhap News, a South Korean media house, on Feb. 6, expressing that a Seoul District Court delivered Shin's sentence. Shin was taken into custody on Aug. 7, 2023, after being indicted with charges, including fraud, record forgery, and interference with business operations through computer resources.
The technology lead at Bitsonic, known only as Mr. A, also received a one-year prison sentence for his role in disrupting business activities. The court emphasized that the actions of Shin and Mr. A significantly tarnished the credibility of cryptocurrency exchanges, highlighting their evasion of accountability and absence of remorse.
The court confirmed a substantial proportion of customer funds remains unaccounted for. It explained that Shin, between January 2019 and May 2021, manipulated the exchange's transaction volume. He inflated the price of the exchange's own token by using Bitsonic's resources. He also injected counterfeit South Korean Won into Bitsonic's system to create an illusion of cash deposits. Further, Mr. A developed software that purchased Shin's held cryptocurrency to artificially hike prices on the exchange.
Shin also disseminated a fraudulent announcement on Bitsonic's platform, claiming a partnership with an international exchange. This all came to light when investors could not withdraw their funds, leading to the uncovering of Shin misappropriating $7.5 million in customer funds. Bitsonic halted its operations in August 2021, alleging both internal and external challenges.
In another related development on Feb. 6, officials at the Seoul Prosecutors Office detained the CEO and two other top executives associated with Haru Invest, a platform for cryptocurrency yield investment. The company halted withdrawals in June the previous year. Prosecutors claim that the trio confiscated $830 million (1.1 trillion Korean won) in cryptocurrency from around 16,000 users, mainly by diverting the money back into the platform between March 2020 and June 2023.
Published At
2/7/2024 9:04:04 AM
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