Amid the surge in Bitcoin prices following the U.S. presidential election, the Seoul Southern District Prosecutors' Office Virtual Asset Crime Joint Investigation Team (Joint Investigation Team) is accelerating its investigation into virtual asset crimes. Recently, the Joint Investigation Team has been conducting intensive investigations targeting operators suspected of manipulating coin prices and engaging in fraudulent sales.
The Seoul Southern District Prosecutors' Office Joint Investigation Team (led by Chief Prosecutor Park Geon-wook) is currently investigating a fraud case related to BASIC coin. Last month, the investigation team conducted a search and seizure at the location of Kim, a former director of the coin issuer. It is known that the prosecution has applied charges of fraud under the Act on the Aggravated Punishment of Specific Economic Crimes against Kim. Earlier this month, the investigation team also conducted search and seizures at major virtual asset exchanges where BASIC coin was listed, including Upbit, Bithumb, and Coinone, summoning them as witnesses.
BASIC coin was delisted from major domestic exchanges in April last year following a decision by the Digital Asset Exchange Association (DAXA). According to the decision made by DAXA, which consists of the five major virtual asset exchanges, BASIC coin was removed from Upbit, Bithumb, and Coinone.
On April 14 last year, Upbit announced the termination of trading support for BASIC coin, stating, “We confirmed suspicious loan contracts repeatedly made, including abnormal loan contract forms related to the coin issuer’s digital asset lending business or contracts involving conflicts of interest with the representative individual.” Kim, who was an internal director of the coin issuer, resigned on the day the delisting was announced. Kim is involved in significant incidents and key figures in the virtual asset market. Although Kim was suspected of manipulating the price of Arowana coin, known as the ‘Hancom Group coin fraud,’ he was not indicted at that time. Arowana token is a virtual asset invested in by Hancom With, a blockchain specialist company affiliated with the Hancom Group. At the time, allegations were raised that Kim Sang-cheol, chairman of Hancom Group, used this token to create slush funds.
The investigation team believes that Kim conspired with Shim, known in the industry as the ‘Coin President,’ in this case. Shim is known as a scam coin specialist and was involved in a 15 billion KRW Queenbee coin (QBZ) sales fraud case. He is accused of committing fraud by distributing false and exaggerated promotional articles claiming that after listing, he sold remaining coins and acquired investments or strategic partnerships from overseas foundations, and used these claims to promote exchange events to sell large quantities of coins.
Shim is already serving a sentence for other coin fraud charges. In May last year, the Supreme Court confirmed a two-year prison sentence for fraud under the Act on the Aggravated Punishment of Specific Economic Crimes. He is accused of deceiving investors by claiming that “an investment of 100 billion KRW from China is expected” and selling TMGT coins worth over 1.7 billion KRW.
The investigation team plans to review whether to request an arrest warrant for Kim based on the analysis of seized materials.
Reporter Lim Hyun-kyung, Legal Newspaper
※This article is based on content supplied by Law Times.
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