[Asia Economy Reporter Kim Daehyun] A man in his 40s who was prosecuted for embezzling virtual assets worth about 14 billion won by abusing the password of a virtual asset electronic wallet trusted and informed by an acquaintance was sentenced to 6 years in prison in the first trial.
According to the court on the 29th, the Criminal Division 33 of the Seoul Central District Court (Chief Judge Noh Hoseong) recently sentenced Lee (48, male), who was indicted on charges of fraud under the Act on the Aggravated Punishment, etc. of Specific Economic Crimes, violation of the Information and Communications Network Act, and violation of the Act on the Concealment of Criminal Proceeds, to 6 years in prison.
Previously, Lee was prosecuted for sharing the 'mnemonic code' of an acquaintance's electronic wallet, which he had identified in advance, with accomplices staying in Manila, Philippines, and then stealing the virtual assets contained in the electronic wallet. An electronic wallet is used to store and trade virtual assets, and the mnemonic code is a 'recovery key' of the electronic wallet consisting of 12 English words, used to activate the electronic wallet itself on another device.
Lee and the acquaintance built a relationship in 2014 through a Bitcoin investment club. In 2017, Lee received a request from the acquaintance to help participate in Bitcoin airdrop marketing, during which he came to know the electronic wallet code.
It was investigated that Lee accessed the acquaintance's electronic wallet again in September last year using this code and identified that Bitcoin and Ethereum were stored there. According to the prosecution, in December of the same year, he delivered the code to accomplices to infiltrate the electronic wallet, and the accomplices arbitrarily restored and accessed the acquaintance's wallet account on a certain virtual asset exchange site. As a result, virtual assets worth a total of 14.3 billion won at the market price at the time (142.7 Ethereum, 240 Bitcoin) were stolen.
The first trial found all of Lee's charges guilty. It pointed out that "he meticulously planned the crime by receiving and storing the code by exploiting the trust relationship and conspiring with accomplices on methods to launder the stolen virtual assets," and "to obstruct tracking, he used multiple electronic wallets, exchanges, and virtual asset exchange offices to hide the assets through hundreds of transactions, showing very unfavorable circumstances after the crime." It also stated, "He was not forgiven by the victim, and there is no evidence of substantial effort to reach a settlement."
The court added, "However, a significant portion of the virtual assets embezzled with the accomplices were seized by investigative agencies or returned to the victim after the indictment, so the risk of loss has been greatly realized," and "Most of the virtual assets personally distributed to the defendant appear to have been seized by investigative agencies, so the actual profit is considerably less than the amount of damage."
Lee appealed the first trial verdict.
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