South Korean Court Sentences Bitsonic CEO to Second Jail Term for Crypto Fraud Scheme

The CEO of South Korean crypto exchange Bitsonic, Shin Jin-wook, has been handed a second jail term for his involvement in a fraud scheme linked to the exchange’s proprietary token, Bitsonic Coin (BSC). The Daegu District Court found that Shin defrauded customers of 160 million won ($115K) by artificially inflating BSC’s trading volume and market price through false announcements and misleading transactions [1]. The court ruled that Shin used fabricated KRW points from buybacks to purchase Bitcoin and Ethereum from members, later converting these digital assets into cash and redirecting the funds toward businesses unrelated to the exchange. These investments were locked in under false pretenses, preventing investors from retrieving their assets or returns [1].

Judge Seong Gi-jun emphasized that while Shin had not reached a full settlement with victims, he did admit to his wrongdoing and showed signs of remorse. The court took into account the nature, motive, and circumstances of the crime when determining the sentence [1]. This is the second time Shin has faced legal consequences for his actions at Bitsonic. In February 2024, he and the exchange’s chief technology officer, surnamed Bae, were jointly sentenced to a combined 8 years in prison for manipulating crypto prices and reaping profits from the scheme. At that time, Shin had negotiated a settlement with two of the most severely affected victims [1].

Both executives received relatively lenient sentences, as neither had prior convictions for similar offenses. South Korean law allows for appeals at the High Court and Supreme Court, meaning the latest ruling is not yet final [1]. The Bitsonic case remains a high-profile example of the risks associated with crypto exchanges, particularly those lacking robust oversight. The exchange collapsed in 2021, triggering widespread criminal investigations and raising concerns about the integrity of the local crypto market [1].

The ongoing legal proceedings against Shin underscore the increasing regulatory focus on crypto-related fraud in South Korea. As the industry continues to grow, courts and enforcement agencies are demonstrating a stronger willingness to hold operators accountable for misconduct. However, the challenges of recovering investor funds and restoring trust remain significant, especially in cases where fraudulent activities have been concealed over extended periods [1].

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[1] Bitsonic CEO Faces Second Jail Term Over Fraud (https://cryptonews.com/news/bitsonic-ceo-faces-second-jail-term-over-fraud/)