'450 Billion Won Cryptocurrency Scam' Coinup Multi-Level Marketing Team Leader and Manager Sentenced to Prison with Probation

Kang Seok-jung, CEO of 'Coinup,' sentenced to 16 years in prison for cryptocurrency investment fraud involving billions of won
[Photo by Yonhap News]

[Asia Economy Reporter Kim Daehyun] Employees actively involved in the multi-level marketing process of the cryptocurrency WEC Coin, related to the 450 billion won 'Coinup investment fraud,' have been sentenced to prison terms with suspension.

According to the court on the 20th, Judge Park Heegeun of the Seoul Central District Court Criminal Division 18 recently sentenced Team Leader A (64, female) of Coinup, who was indicted for violating the Act on the Regulation of Conducting Fund-Raising Business without Permission and the Door-to-Door Sales Act, to one year in prison with a two-year suspension. B (62, female), who was a manager, was sentenced to four months in prison with a one-year suspension.

Earlier, A and B were prosecuted for conspiring with the so-called 'Cash Gang' CEO Kang Seokjeong, who effectively operated the company in 2018-2019, and for participating in the multi-level marketing crime of WEC Coin by holding business briefings and recruiting investors.

They are accused of deceiving investors with false claims such as the cryptocurrency being used for foreign tourists' currency exchange and ATM cash withdrawals, or doubling the investment within 10 weeks. CEO Kang is also accused of displaying a photoshopped picture of himself with former President Moon Jae-in in the office to appear as a competent entrepreneur. It was found that A raised a total of 922 million won in 59 installments, and B raised 95 million won in 8 installments.

According to the prosecution, Coinup had a typical multi-level structure. Six ranks were created in the order of Deputy Manager → Manager → Team Leader → Deputy CFO → CFO → General CFO, and to be promoted to a higher rank with higher allowances, one had to increase sales or have subordinate employees.

Judge Park found both A and B guilty. He stated, "The acts of illegal fund-raising and multi-level marketing in this case disrupt sound economic order and produce many victims, making it a crime with significant social harm. The defendants who participated bear considerable responsibility." He also criticized A, saying, "(The scale and frequency of the crimes) are not insignificant."

Regarding B, who denied the charges, the judge said, "At morning meetings presided over by the CFO, B received information about the WEC Coin price, package product composition, allowance rates, and progress of related profit businesses, and explained what was heard from superiors to investors to attract investments." He added, "B also received recruitment allowances accordingly."

It was investigated that B encouraged large investments from subordinate investors, even using family members' names, to be promoted to a higher rank. B appealed the first trial verdict. Meanwhile, CEO Kang was previously indicted for Coinup investment fraud, sentenced to 16 years in prison, and is currently incarcerated.