In the realm of cryptocurrency exchanges, a significant development occurred when Jinwook Shin, the CEO of Bitsonic, a prominent crypto exchange, was arrested by South Korean law enforcement on August 7th. This arrest follows a serious investigation into alleged wrongdoing related to the embezzlement of investments and deposits from Bitsonic users.
Authorities allege that over a span of approximately two years, from January 2019 to May 2021, Shin orchestrated a scheme involving the manipulation of cryptocurrency prices and trading volumes on the Bitsonic platform. This manipulation is said to have led to the misappropriation of a substantial sum, equivalent to 10 billion South Korean won or approximately $7.5 million, from unsuspecting exchange users.
What adds to the gravity of this case is the revelation that, even as Bitsonic faced liquidity issues and suspended withdrawal services, the CEO continued to attract investments and deposits from new clients, perpetuating the fraudulent activities. This underscores a concerning breach of trust between the exchange and its users, who were lured into the platform under false pretenses.
The investigation, initiated in 2021, has also expanded its focus to the involvement of the company’s vice president, known as Mr. A. Allegedly, Mr. A operated a program aimed at acquiring the cryptocurrency held by CEO Jinwook Shin within the exchange system. This complex manipulation reportedly relied on a paper company established by Shin in Singapore.
Bitsonic operations came to a halt in August 2021, citing a combination of “internal and external issues.” Coincidentally, during the same period, South Korean law enforcement took a stringent stance against fraudulent activities within the cryptocurrency landscape, shutting down 11 local crypto platforms engaged in illicit practices.
In response to the surge in cryptocurrency-related crimes, South Korea has strengthened its regulatory and investigative frameworks. The country has established an interagency investigation unit dedicated to combating cryptocurrency-related offenses. This initiative aims to address the growing concerns about financial losses to investors and the overall security and credibility of the cryptocurrency ecosystem.
By FCCT Editorial Team
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