An illegal XRP exchange operator has been sentenced to eight years in prison in South Korea for duping investors out of nearly $3.4 million.
The unnamed operator stole nearly $2 million from an individual, prosecutors said in a trial at the Seoul High Court.
The illegal XRP exchange has told customers it has a deal with Ripple
The court upheld the verdict of a Seoul district court. This court had already sentenced the operator to 12 years in prison, Namdo Ilbo reported.
However, the High Court judge ruled that the operator had taken steps to compensate one of the victims and therefore reduced the sentence accordingly.
The operator can now accept the verdict or appeal the ruling to the Supreme Court.
The Supreme Court of South Korea. (Source Pectus Solentis {Balibandi}[CC-BY-SA-2.0-kr])
The High Court heard that the defendant became the CEO of a “national cryptocurrency exchange” in 2015.
The exchange “advertised” that it has “signed a formal supply agreement with” XRP token issuer Ripple and Ripple Labs.
The court heard that an individual named B (for legal reasons) sent the fiat exchange worth approximately $2 million in 2015.
The CEO told B that they could pay 20% less than the market rate for the coins. However, the CEO convinced B to keep the coins on the exchange platform.
XRP prices for the last seven days. (Source: CoinMarketCap)
In 2017, the exchange told B that it could increase its holdings from 2.35 million XRP to 3 million in three months. AB was told that they could do this by lending the coins to another victim (C).
The coins were worth about $700,000 at the time, according to media reports.
Other victims fell victim to fraud
The CEO also deceived another investor, referred to as D by the court. The operator, prosecutors explained, deceived D into handing over XRP coins in a loan agreement.
But instead of repaying the loan, the CEO exchanged D’s XRP for Bitcoin. He then sent the BTC to a wallet registered in his son’s name.
The court said some of the victims “suffered enormous harm through no fault of their own.”
The police were unable to recover most of the lost coins and legal securities.
📑 Local media reports that South Korea is taking decisive measures to combat the wave of cryptocurrency-related crimes and fraud cases by establishing its Temporary Virtual Asset Investigation Unit as a permanent entity. This move co…https://t.co/ yd7EObgib1
— Cryptonews.com (@cryptonews) April 29, 2024
CEO ‘skipped bail before re-arrest’
Witnesses also testified that the CEO had tried to get them to make “false statements” absolving him of blame.
The CEO then attempted to escape justice by “asking for a postponement of the sentencing date” and “asking for time to pay damages”.
When judges granted his requests, he took the opportunity to skip bail and go into hiding, before being arrested again two years later.
In his ruling, the presiding judge of the High Court said:
“The defendant has shown no signs of remorse. He has also shown gross contempt for the law, so he must be punished severely.”
🇰🇷 USDT OTC “Thieves” Arrested in Gangnam District, South Korea
Police in Gangnam, an affluent neighborhood in Seoul, South Korea, arrested 10 people accused of stealing money in a fake OTC USDT trade.#CryptoNews #SouthKoreahttps://t.co/1rQB8FIo6M
— Cryptonews.com (@cryptonews) April 2, 2024
In February 2023, the CEO of a fake cryptocurrency bank was sentenced to 10 years in prison for defrauding thousands of South Korean investors out of a total of $181 million.
In January 2023, the Supreme Court sent the head of V Global, another fake cryptocurrency exchange that also defrauded thousands of investors, to prison for 25 years.
The head of another cryptocurrency exchange, Bitsonic, was jailed for seven years for price manipulation in February this year.
