The South Korean crypto exchanges had a blazing week. One of the nation’s legitimate-looking platform’s CEO and Executive director have been sent to jail for three and two years, respectively. This is after a court found them guilty deceiving investors with a bogus transaction.
In Seoul, a branch of the Supreme Court convicted the men, surnamed Choi and Park (first names withheld for legal reasons), of operating a “fake” cryptoasset trading platform and cheating investors’ funds.
The men built a trading platform named Komid, whose website is still online and still looks similar to any local crypto-exchange websites. Yet, the site alerts of server errors and has not been updated with any new report postings since early 2019.
The court learned how Choi and Park enabled customers to make fiat deposits in Korean won (KRW) as well as notable cryptocurrencies, but the rest of the platform was seemingly stuffed with fake information on token listings, fabricated trading volume figures and details of fictitious trades.
Komid also portentously granted traders loyalty points that it said could be redeemed for cash or tokens.
The men had been sentenced to fraud at a previous trial, but appealed, with the case eventually ending up at the Supreme Court.
The Supreme Court upheld the initial criminal decisions, and the Komid chiefs were sentenced on fraud, embezzlement, and hiding the firm’s operating expense-related data from the officials.
After hearing that the authorities stormed a Seoul-based crypto exchange Coinbit amid price manipulation allegations, it has been reported.
A local newspaper claimed that the exchange’s de facto CEO threatened to kill and maim employees – requiring them to carry out false transaction deals and blackmailing them into giving him cash.