Bitsonic CEO Jinwook Shin Sentenced to 7 Years in Prison for $7.5M theft case
Bitsonic CEO Jinwook Shin's sentencing to a seven-year prison term amid a $7.5 million theft scandal has sent shockwaves through the cryptocurrency industry. The scandal, which revolves around accusations of embezzling customer deposits, highlights the challenges facing digital asset exchanges in maintaining trust and integrity within the market.
The CEO of Bitsonic, a leading cryptocurrency exchange, has been sentenced to a seven-year prison term, with the firm’s technology chief facing a one-year jail sentence for embezzling 10 billion South Korean won ($7.5 million) in customer deposits.
According to reports from South Korean media outlet Yonhap News Agency on February 6, Jinwook Shin, the CEO, received a seven-year prison sentence from the Seoul District Court. Shin, who was arrested on August 7, 2023, faced charges including fraud, forgery, falsification of records, and obstruction of business through computer means.
Additionally, Bitsonic’s technology vice president, referred to only as Mr. A, received a one-year jail term for obstructing business through computer activities.
The court emphasized the severe damage inflicted on trust in crypto exchanges by Shin and Mr. A, noting their lack of remorse and evasion of responsibility.
Shin, the central figure in the scandal, was sentenced to seven years in prison. The court also noted that a substantial portion of customer funds remains unrecovered.
The court detailed Shin's manipulation of transaction volumes on Bitsonic between January 2019 and May 2021. Shin utilized Bitsonic's funds to inflate the price of its own token artificially, alongside depositing counterfeit currency into the exchange’s system to simulate cash deposits. Mr. A further exacerbated the scheme by developing a program that inflated cryptocurrency prices on the exchange by purchasing assets held by Shin.
Furthermore, Shin disseminated false information on Bitsonic, falsely claiming a partnership with another international exchange.
The fraudulent scheme collapsed when investors were unable to withdraw their funds, as Shin had misappropriated $7.5 million in customer assets. Bitsonic ceased operations in August 2021, citing both internal and external issues.
In a separate incident on February 6, the Seoul Prosecutors Office arrested the CEO and two other executives of Haru Invest, a crypto yield platform. The platform had suspended withdrawals in June 2023. Prosecutors alleged that the trio had embezzled 1.1 trillion won ($830 million) worth of cryptocurrency from 16,000 users, primarily by reinvesting the funds between March 2020 and June 2023.
