The CEO of South Korean exchange Bitsonic, Shin Jinwook, has received an extension to his seven-year prison sentence after authorities found evidence of fraud amounting to at least 100 million won or $72,000.
Summary
- Bitsonic CEO Shin Jinwook was sentenced to six months in prison on top of his initial seven-year sentencing from 2023.
- Exchange executives fooled investors and defrauded customers by manipulating the price of its native token, BSC.
On August 5, Judge Seong Gi-jun of the 1st Criminal Division of the Western Branch of the Daegu District Court sentenced Shin, who was indicted on charges of fraud that involved the now-closed exchange’s native token, Bitsonic Coin or BSC.
The token that shares its acronym with the major crypto exchange Binance’s own Binance Smart Chain was allegedly manipulated by Shin in an effort to inflate the price and fool traders into investing their funds towards the digital asset.
Shin allegedly used the funds alongside the false Korean won points obtained through buybacks of the token to purchase Bitcoin (BTC) and Ethereum (ETH). He would then convert the two major assets into cash and use the money to invest in other companies unrelated to exchange.
Based on the verdict, Shin was found to have defrauded customers of a total of 160 million won by inflating BSC trading volume and market price after inducing transactions through false announcements.
No longer trading on the market, CoinMarketCap data shows that the BSC token had a maximum supply of 500 million BSC.
This second sentencing comes nearly two years after Shin was condemned to seven years in prison by a South Korean court for allegedly misappropriating 10 billion KRW ($7.5 million) from customer deposits, and manipulating trading volumes between January 2019 and May 2021.
This number represents only a small portion of the larger 4 trillion won (around $3 billion) worth of potentially fraudulent crypto‑related fraud recorded by South Korean authorities from 2017 to mid-2022.
Bitsonic CEO and tech executive wrapped up in 10 billion won fraud scandal
As previously reported by crypto.news, Bitsonic’s CEO, Jinwook Shin was found guilty of fraud, forging and falsifying records, and obstructing a business via computer. He was sentenced to seven years in prison on Aug. 7, 2023, following allegations that he manipulated transaction volumes on the exchange.
In addition to fraud charges, Shin entered false South Korean won into the exchange’s system to simulate fake cash deposits. He also purposely misled investors by publishing announcements about partnerships with international exchanges.
Shin’s deception was discovered after investors were unable to withdraw funds, leading to the discovery that Shin had diverted $7.5 million in customer deposits for his own use.
Shin’s defrauding activities were supported by the exchange’s technology vice president, known only as Mr. A, who supported Shin’s fraudulent activities by creating a program that inflated prices by purchasing cryptocurrency owned by Shin. Mr. A was sentenced to one year in prison.
Bitsonic’s imminent downfall
Launched in April 2018, Bitsonic is a cryptocurrency exchange based in South Korea. The exchange supports Korean won fiat and crypto trading pairs. It also shares trading revenue with holders of its native token, BSC. Investors can stake or un-stake the BSC coin and manually select between rewards and liquidity.
Unfortunately the exchange only lasted three years before it ceased operations in August 2021, citing “internal and external issues.” This came after customers complained about liquidity problems and inability to process withdrawals.
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