"The Defendants Bear Heavy Responsibility for Deceiving Victims and Embezzling Large Sums"
A group that deceived investors by claiming that the price of a coin would more than double upon listing, thereby making huge profits, and embezzled about 1 billion won, has been sentenced to imprisonment.
The Criminal Division 6 of Busan District Court (Presiding Judge Kim Yong-gyun) announced on the 25th that company CEO Mr. A, and internal directors Mr. B and Mr. C, who were indicted for violating the Act on the Aggravated Punishment of Specific Economic Crimes (fraud), were sentenced to 4 years and 6 months, 3 years and 6 months, and 2 years and 6 months in prison, respectively.
Handcuffs. Photo by Yonhap News
According to the facts recognized by the court, around May 2019, they set up an office in Busan and attracted investors by advertising that they would select and trade about 1,000 world-class coins on their behalf, guaranteeing no losses with a six-step safety device and a monthly profit of 30%.
Two victims who were deceived by them invested 109.7 million won and 54.85 million won, respectively. A month later, Mr. A and others induced further investment by claiming that if they invested in a coin they developed themselves, the price would more than double after listing, and they would receive interest coins equivalent to 1.3% of the investment amount daily, which could be sold.
The two victims were deceived again by these claims. They transferred much larger amounts of about 570 million won and 240 million won to them. The coins Mr. A promised profits on were actually listed on two domestic exchanges in August and October 2019, with an initial price of 4 to 5 won per coin.
However, as the market price fell and trading volume decreased, the price plummeted, and Mr. A’s company failed to continuously pay management and marketing fees to the exchanges, resulting in delisting in December of the same year.
Although the victims received some coins as interest on their investment, they suffered huge losses as they could neither sell due to the company’s one-year suspension of coin trading nor the coin’s delisting.
Mr. A and others denied the charges in court, claiming they did not deceive investors by failing to explain the risk of principal loss in advance. However, the court stated, “Although the defendants issued promissory notes promising full refund of the investment, they did not keep them, and the listed coins had neither economic value nor substance, sufficiently proving the fraud.”
Regarding the sentencing, the court said, “The defendants bear heavy responsibility for deceiving victims and embezzling large sums,” and added, “It is questionable whether they sincerely reflect on their crimes.”
Unlike Mr. A and Mr. B, the court did not detain Mr. C in custody to give him an opportunity to restore the damages.
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