Second Fraud Case Filed Against South Korean Crypto Exchange Executive

Reports have revealed that Shin Jin-wook, the CEO of South Korean cryptocurrency exchange Bitsonic, has been given a second prison sentence for a new fraud allegation.

Located in Daegu, Shin was adjudged guilty of distorting trading statistics and deceiving customers. He is already undergoing a seven-year imprisonment for misappropriating ₩10 billion (approximately $7.5 million) in deposits, and now confronts additional jail time due to a less extensive but still grave scheme.

Inflated Trading Volume And Deceptive Announcements

As per the Daegu District Court, Shin utilized fraudulent trading statistics to artificially inflate the cryptocurrency market value of Bitsonic Coin (BSC). He enticed customers with fabricated announcements and amplified “KRW points” through fraudulent buybacks.

These points subsequently financed genuine purchases of Bitcoin and Ethereum from platform users. Upon converting the cryptocurrencies into cash, Shin invested the funds into unrelated companies.

The court determined that this cycle resulted in approximately ₩160 million ($115,000) in illicit earnings.

Investigators pointed out that Shin also assured investors of a lock-up period guarantee. In truth, neither the investments nor the promised interest could be retrieved. When victims demanded their capital, they found the commitment to be empty.

Previous Price Manipulation Conviction

In February 2024, both Shin and Bitsonic’s chief technology officer, known solely by the surname Bae, were sentenced to a cumulative eight years in prison for a distinct fraud associated with price manipulation.

Reports indicated that this prior judgment arose from a Seoul District Court finding that both executives deceitfully profited by inflating trading volumes. At that juncture, Shin settled with the two largest victims, which the judge noted helped warrant a more lenient sentence.

The February ruling highlighted that neither Shin nor Bae had previous convictions for comparable offenses. Judge Seong Gi-jun remarked that their lack of a criminal history and Shin’s partial restitution to major victims influenced a “lenient” approach under South Korean law.

However, the substantial sums involved—₩10 billion in deposits and the recent ₩160 million—underscore the magnitude of trust these executives violated.

Concerns Over Exchange Regulation

According to Digital Asset reports, experts suggest that the situation surrounding the crypto exchange Bitsonic highlights gaps in real-time monitoring of exchange activities.

Inflated volumes and unverified lock-up guarantees are likely to go unnoticed without more robust on-chain analytics. Customer confidence diminishes every time a high-profile exchange scandal occurs.

Some traders are already urging mandatory proof-of-reserves audits and transparent order books to aid in deterring such misconduct.

Featured image from FLETA, chart from TradingView

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