S Korean Crypto Execs Get Jail Sentences over Fake Volumes
The former and the current CEOs of Komid have been part of a $45 million scheme, according to a South Korean court.
The leaders of South Korean crypto exchange Komid have been jailed for participating in fraudulent activity, as local media Blockinpress reported. According to the court, company executives Choi Woo-hyuk and Park Sung Jun faked volumes on the exchange, which led to 5.9 billion won ($45 million) in damages to customers.
The court ruled three years imprisonment for Choi, while Park received two years behind bars. The report names the former as a chief executive officer and the latter as a high-level director. However, according to a recent Komid announcement, Choi resigned in December, and Park was promoted to the CEO position, assuming office in early January. The exchange did not disclose reasons for the former CEO’s departure.
According to the court ruling, the two men created a joint account in 2018 and made five million fake transactions. The defendants also used a bot to attract new customers by automatically sending a large number of orders.
“Choi has committed fraud for a countless number of victims for a long period of time. Furthermore, he holds the financial authorities responsible for failing to keep track of the industry better,” the court ruling reads.
The court decision is a victory for South Korean prosecutors investigating the issue in 2018. Last month, the authorities charged another crypto exchange, Upbit, with defrauding clients to the tune of 254 trillion won ($226 million) through a corporate trading account. The prosecutors charged three of the company’s employees: the chairman of the board, the financial director, and a working-level official. Upbit has denied all accusations.
Komid has not issued an official statement yet. The last company announcements are related to an upcoming listing of Bitcoin SV (BSV) and OmiseGO (OMG).