- The exchange set a minimum deposit limit of 6 million won for users, promising to triple it
- Over 50,000 investors were scammed, some of whom saw their retirement funds disappear
Seven executives of V Global, a South Korean crypto exchange, were sentenced to prison for committing fraud in the amount of 2 trillion won, roughly equivalent to $1.7 billion, CoinDesk reported, citing local media.
Longest sentence is 22 years in jail
Ex-CEO of the exchange, Lee Byung-gul, received a sentence of 22 years and was ordered to pay a 106.4 billion won fine by a court in the country’s southern region of Suwon. Authorities seized 10 billion won from his account.
The other six executives received sentences ranging from four to 14 years and fines ranging from 2.3 billion won to 106.4 billion won.
Extensive regulatory deploying
South Korea has been trying to set a regulatory framework for crypto since the beginning of last year. Legislators have also called for criminalization of market manipulation.
False promises
The now defunct exchange set a minimum deposit limit of 6 million won for users, promising them their deposit would be tripled. They returned 18 million won in the exchange’s native token V Cash, the medium Forkast reported.
The exchange also rewarded investors with a commission of 1.2 million won for referring new users.
50,000 victims
According to the prosecuting court, V Global cheated over 50,000 investors, some of whom even saw their retirement funds disappear. The exchange took funds from other users’ deposits to offer other users returns, Forkast added.
Measures against unfair crypto market behavior
The country’s watchdog, the Financial Services Commission (FSC), wants to criminalize unfair behavior in crypto markets, such as insider trading and price manipulation, according to a report submitted to the South Korean Parliament on Nov. 23.
Parliament ordered the FSC to draft a comprehensive crypto bill in one month at the time. The FSC recommended punishments relative to the illicitly obtained profit, with fines four times the profit on average and a minimum of one year in prison.
The regulator also calledfor taxes on some types of NFTs, reversing earlier statements that indicated those assets would be exempt.
20% crypto tax starting in 2022
South Korea plans tobegin levyinga 20% tax on crypto gains over KRW 2.5 million ($2,100) in 2022. The Korea Times reported that both the ruling and opposition parties had called for an extension to the deadline.
A long and thorny road
S. Korea looks like it’s on a long and thorny road to regulation. In April 2021, the FSC asked all virtual asset service providers in the country to register with the Financial Intelligence Unit (FIU), its anti-money laundering arm, by Sep 24. Only 10 had done so by then.
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