The head of a coin management firm put on trial on charges of manipulating virtual asset prices to pocket 7.1 billion won in illicit gains was sentenced to prison in the first trial.
The Seoul Southern District Court Criminal Division 14 (Chief Judge Lee Jeong-hee) on the 4th sentenced a coin firm head, a person surnamed Lee who was indicted and detained on charges of violating the Virtual Asset User Protection Act, to three years in prison, a fine of 500 million won, and forfeiture of about 846 million won. A person surnamed Kang, a former employee of the coin firm indicted on the same charge, received a three-year suspended sentence on a two-year prison term.
However, the court did not revoke Lee's bail (release with conditions such as a bond), considering that Lee faithfully attended trial and had been tried while in custody, so Lee was not taken into custody in court.
They were accused of inflating coin trading volume by using an automated trading program and repeatedly submitting bogus buy orders to manipulate prices from July 22 to Oct. 25, 2024, reaping about 7.1 billion won in illicit gains.
The average daily trading volume of the coins they traded was around 160,000 as of July 21, 2024, before the crime, but the day after the crime began the volume surged to 2.45 million. Of that, 89% was confirmed to be trades by Lee.
Regarding the case, the court said, "It is a serious crime that hinders the fair price formation function of the virtual asset market and undermines investor trust," adding, "It poses unpredictable risks to an unspecified number of investors and is highly blameworthy."
The court added, "Strict punishment is needed because they did not recognize the seriousness of the crime and did not reflect," and "They planned and led the crime and carried it out in a calculated and bold manner."
However, the court did not accept part of the indictment in which prosecutors alleged the defendants net sold about 1.22 million coins and took about 7.1 billion won in illicit gains, saying proof was insufficient.
This case is the first violation of the Virtual Asset User Protection Act that prosecutors received on a fast track (emergency measure) from the Financial Supervisory Service after the law took effect in July 2024.
At the sentencing hearing held in November last year, prosecutors asked the court to sentence Lee to 10 years in prison and a fine of about 23 billion won, and Kang to six years in prison.