A man in his 30s who lured customers through Telegram and ran an unreported currency exchange business worth 3.4 billion won by converting virtual assets into cash through so-called "hand-to-hand transactions" was sentenced to prison.
On the 5th, Chuncheon District Court Criminal Division 1 single-judge Director General Judge Jeong Jong-geon said A, 34, who was put on trial on charges of violating the Act on Reporting and Using Specified Financial Transaction Information, was sentenced to one year in prison.
A, together with acquaintances B and C, is accused of converting customers' Tether (USDT) into cash a total of 152 times from January to June this year. The USDT they transacted totaled 2,286,971, worth about 3.39 billion won at the time.
They created a virtual asset exchange channel on Telegram to recruit customers. They met customers in person, received USDT, took a 2–5% fee on the transaction amount, and paid out the remaining amount in cash.
Businesses seeking to engage in activities related to buying and exchange of virtual assets must report their trade name, representative's name, establishment address, contact information, and more to financial authorities under the Act on Reporting and Using Specified Financial Transaction Information. However, A and others continued their exchange business without going through a separate reporting process.
They also divided roles. A and B used Telegram to recruit customers and met them in person to exchange virtual assets and cash. C withdrew from an account the cash to be paid to customers, promoted the exchange channel, and was found to have personally visited customers in the provinces to conduct transactions.
The court pointed out that unreported virtual asset transactions can be connected to serious crimes such as money laundering.
Director General Judge Jeong said, "Money-laundering activities using cryptocurrency are being used as a key means that help bring serious crimes such as voice phishing, gambling, and drugs to fruition," and noted that it is necessary to strictly punish operating virtual asset transactions without reporting.
He went on to rule, "Over a period exceeding five months, they repeatedly received cryptocurrency, exchanged it for cash, and delivered it, and considering that they obtained considerable profits, their culpability is heavy."
However, the court reflected in sentencing that A admitted to the crime and had no prior record of similar offenses, and imposed a one-year prison term.