The top executive at a South Korean scam crypto exchange that duped over 50,000 investors out of a combined $1.7 billion will serve an eight-year jail sentence after a court found him guilty of fraud.
Kyeongin Ilbo and Economist.co.kr reported that the Criminal Division of the Suwon District Court sentenced a “top-tier” V Global executive surnamed Yang to eight years in prison. Another “leading” executive surnamed Oh received a three-year term.
Both were found guilty of crypto-specific fraud charges. Another individual, surnamed Lee and identified as the firm’s CEO, was sentenced to 25 years behind bars in a separate trial.
The court also handed out jail terms to five other individuals, who were given three years behind bars and five years probation.
Police and prosecutors have been investigating the V Global exchange for almost two years. Although the platform was engineered to look like a bona fide crypto trading platform, the court heard that it was in fact a front for a sophisticated multi-layered pyramid scheme.
Customers were encouraged to “recruit” new platform “members.” And older members were paid with money from new “recruits.”
Scam Crypto Exchange Execs Promised 300% Gains
Investigators stepped in after a group of disgruntled investors said they could not withdraw their tokens from the exchange. Customers explained that they had been drawn in by V Global’s promises of 300% growth on their initial stakes.
The court heard that “once the police investigation began,” the executives aided Lee, and “destroyed evidence.” The judge added that they had attempted to “interfere with the investigation.”
Reporters stated that executives “appeared nervous” throughout the trial, and “stared at the ground with their hands together.”
The judge stated that the crime was sizable and had “disrupted the financial order.”
Lawyers representing groups of victims expressed their disappointment at the verdict, however. Prosecutors and victim groups had pushed for maximum, life sentences. Prosecutors and defendants have the right of appeal – and may decide to challenge the sentences at the high court.