The CEO of Bitsonic, a crypto exchange based in South Korea, was recently arrested on allegations of embezzling $7.5 million from the exchange’s users. Jinwook Shin, currently under investigation for manipulating trading volumes and prices on the platform, was apprehended by the police on August 7th. Additionally, Mr. A, the vice president of Bitsonic, will face trial without preliminary detention.
Prosecutors claim that Shin manipulated Bitsonic’s data from January 2019 to May 2021, tricking users into trading cryptocurrencies at artificially inflated or undervalued prices. Allegedly, he made a substantial profit of approximately 10 billion won ($7.5 million) through this scheme. He established a paper company in Singapore to conceal his actions.
Despite Bitsonic facing liquidity issues and suspending withdrawals in August 2021, Shin continued to offer cryptocurrency to new clients. The exchange attributed its operational suspension to various internal and external challenges.
The police have also accused Mr. A of orchestrating a program to acquire the cryptocurrency held by Shin on the exchange system, thus facilitating his fraudulent activities.
Bitsonic Is Not The Only Crypto Platform Under Scrutiny
The arrest of Shin forms part of a broader crackdown on cryptocurrency crimes in South Korea. The country has witnessed an alarming increase in illicit activities within the market. Furthermore, during the same month, the police took swift action and shut down 11 local crypto platforms due to their involvement in fraudulent schemes, money laundering, and hacking.
South Korea has recently established an interagency investigation unit to combat cryptocurrency crimes. The primary objectives of this unit are safeguarding investors and regulating the industry. It comprises officials from notable agencies, including the Financial Services Commission and the Financial Supervisory Service. Additionally, it includes representatives from the Korea Exchange and the Korea Financial Intelligence Unit.
The unit’s primary responsibility is to monitor and investigate suspicious transactions. These may include cases involving substantial sums of money, anonymous accounts, or foreign exchanges. Additionally, it actively collaborates with international organizations to effectively pursue cross-border crimes.
The arrest of Bitsonic’s CEO and vice president serve as a stern warning to other crypto platforms potentially involved in illicit activities. Additionally, the authorities are relentless in their pursuit of justice for the victims. Moreover, they are committed to restoring trust in the market.
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“The author’s views are for reference only and shall not constitute any investment advice. Please ensure you fully understand and assess the products and associated risks before purchasing.”
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