South Korean Supreme Court Jails $153m Crypto Fraudster for 10 Years


South Korean Supreme Court Jails $153m Crypto Fraudster for 10 Years

A South Korean Supreme Court has sentenced the operator of a cryptocurrency scam to 10 years in jail and fined him more than 150 million won ($153 million).

The operator, a former stock broker in his late 40s who was identified by his surname Lee, was found guilty of running a fraudulent investment project that muddied up to 8.8 billion won (roughly $8.8 million) from over 1,000 investors across South Korea.

The case – which is one of the largest crypto scams ever prosecuted in South Korea – dates back to 2019, when hundreds of investors filed a complaint against Lee for fraudulently promising a return of 12.5% on a cryptocurrency investment scheme he was running. According to the court’s ruling, Lee had also promised investors an additional bonus of 1% for each month the funds were held.

The ruling stated that Lee had used deposits made by investors to invest in his own cryptocurrency projects, yet failed to pay investors whenever they requested a withdrawal. It further stated that instead of paying back investors, Lee had resorted to further issuing fake tokens to delay the situation while continuing to rake in more investments from new investors.

The ruling also described that Lee was running a pyramid scheme, “The court has concluded it is a typical financial pyramid scheme that provides a return to early investors by attracting new investors.”

The sentence handed down to Lee is the most severe handed down in South Korea for a cryptocurrency case, and is a strong precedent set by the courts to deter those engaging in similar fraudulent activities. It marks the first time a South Korean court has acknowledged a fraudulent cryptocurrency scheme and is likely to also embolden the South Korean government in their ongoing Bitcoin regulation efforts.