Executives of Korean Exchange Sentenced to Jail for Faking Volumes

Two executives of a South Korean cryptocurrency exchange have reportedly been sentenced to jail for inflating trading volumes on their exchange. The pair allegedly used a bot to fake large orders in both cryptocurrencies and Korean won.

Prison Sentences

Two executives of South Korean cryptocurrency exchange Komid were sentenced to jail on Thursday “for their roles in orchestrating fraudulent trading volume reports on their platform,” The News Asia reported.

One of the executives is the CEO of the exchange, Choi Hyunsuk. He received a three-year prison sentence while the other executive received a two-year jail sentence, Maekyung publication detailed, asserting:

Damaged Confidence

The judge explained that “Choi has committed fraud for a countless number of victims for a long period of time,” the news outlet conveyed. “There is a need for punishment because the damage caused by the creation of false electronic records is large,” Maekyung quoted him as saying.

However, Edaily reported that the judge took into account the fact that the damage was minimized as some funds were returned. In addition, he found that “The defendants did not appear to have committed a crime with strong fraudulent intentions.” Nonetheless, he concluded:

Cryptocurrency exchanges have been caught using trading bots to falsify orders since the early days of Mtgox. In December last year, officials of one of the country’s largest crypto exchanges, Upbit, were indicted for fraud. They allegedly faked orders worth approximately $226 billion and sold 11,500 BTC to about 26,000 investors. Upbit has denied the allegations.

Other domestic crypto exchanges in a similar bind include Coinnest, whose executives were indicted in September last year for accepting a bribe. Moreover, employees of crypto exchange HTS Coin were arrested in September last year on suspicion of fraud and embezzlement.