Nikolas Sargeant
The CEO of South Korean cryptocurrency exchange Bitsonic has received a second prison sentence for fraud-related charges, adding to his existing seven-year term for stealing 10 billion won ($7.5 million) worth of customer deposits. Shin Jin-wook faced additional prosecution for his involvement in manipulating Bitsonic Coin trading activities and deceiving investors.
According to South Korean media outlet Digital Asset, a Daegu District Court judge delivered the latest sentence following Shin's conviction for systematic fraud involving the exchange's proprietary token. The case highlights ongoing challenges in South Korea's cryptocurrency sector as authorities continue pursuing exchange operators who have engaged in fraudulent activities.
The court proceedings revealed extensive manipulation schemes designed to artificially inflate cryptocurrency values and mislead investors about market conditions. Shin's conviction demonstrates the serious legal consequences facing cryptocurrency executives who exploit their platforms for personal gain at customer expense.
Systematic Market Manipulation and False Announcements
The CEO defrauded customers for a total of 160 million won ($115,000) by systematically inflating Bitsonic Coin trading volume and market prices through false announcements designed to induce transactions. The court verdict detailed how Shin orchestrated elaborate schemes to create artificial market activity and mislead investors about the token's legitimate value.
Shin utilized false KRW points obtained through manipulated buyback programs to purchase Bitcoin and Ethereum from exchange members. He subsequently converted these digital assets into cash and invested proceeds in companies unrelated to the cryptocurrency exchange, effectively misappropriating customer funds for unauthorized business ventures.
Additionally, the investigation revealed that Shin falsified lockup periods for investors, creating false expectations about fund availability. The court determined that neither the unauthorized investments nor promised interest returns could be provided to affected investors, compounding the financial damage to customers.
Judge Seong Gi-jun acknowledged Shin's admission of wrongdoing during sentencing proceedings. "Although Mr. Shin was unable to reach an agreement with the victims, he admitted his wrongdoing and is reflecting on it," the judge stated, noting that sentencing considerations included the crime's motive and circumstances.
Previous Convictions Result in Combined Sentences
In February 2024, Shin and Bitsonic's chief technology officer, surnamed Bae, received a combined eight years in prison for manipulating cryptocurrency prices and profiting substantially from market manipulation schemes. The Seoul District Court noted that Shin had "reached an agreement with two of the victims who suffered the largest amount of damages" during those proceedings.
The court considered mitigating factors when determining sentences for both Bitsonic executives, noting that neither Shin nor Bae had previous criminal histories involving similar offenses. This lack of prior convictions contributed to what the judge characterized as "lenient" sentences given the severity of the charges.
Under South Korean legal procedures, defendants maintain the right to appeal guilty verdicts and sentences through both High Court and Supreme Court proceedings. This appellate process allows convicted individuals to challenge both factual determinations and sentencing decisions through higher judicial review.
The multiple convictions against Bitsonic leadership reflect broader enforcement efforts by South Korean authorities to address cryptocurrency fraud and protect investors in the rapidly evolving digital asset market.
