South Korean authorities have arrested Bitsonic CEO Jinwook Shin on charges of embezzling investments and deposits belonging to the exchange users. This arrest follows an extensive investigation that has unveiled a web of manipulative practices within the exchange.
According to a report by South Korean news outlet Chosun Biz, Shin is accused of orchestrating a series of fraudulent activities during his tenure as the CEO of Bitsonic, which spanned from January 2019 to May 2021. One of the primary allegations against Shin is that he artificially inflated cryptocurrency prices and trading volumes on Bitsonic’s computer system.
An official from the prosecution reportedly stated:
“Shin tried to artificially increase the price of self-issued cryptocurrencies by manipulating the system computer and using cross-trading, taking advantage of the fact that he is both operating a virtual asset exchange and issuing cryptocurrencies.”
Shin was also accused of withholding critical information from investors.
Amid mounting deficits and an inability to fulfill withdrawal requests from investors, Shin is alleged to have concealed and sold 10 billion won worth of cash and virtual assets. The investigation also uncovered that Shin operated a paper company established in Singapore to facilitate these manipulative actions.
Shin also made a false notice during this period stating, “We have entered into a business partnership with a famous overseas virtual asset exchange.”
South Korean authorities’ ongoing investigation into the case began in 2021, and it also includes Bitsonic’s Vice President, identified as Mr A in the report. Mr. A was accused of creating and overseeing a scheme enabling Shin to buy cryptocurrency from Shin’s holdings within the exchange platform. The VP has also been billed to undergo trial without being held in detention.
This development arrives on the heels of South Korea’s establishment of the Joint Investigation Centre for Crypto Crimes in July 2023. The specialized unit is composed of 30 experts from legal, financial, tax, and customs backgrounds. Its mission is to combat cryptocurrency-related offenses and enforce regulations to protect investors.
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