Jinwook Shin, the CEO of Bitsonic, a prominent cryptocurrency exchange, has been apprehended by South Korean authorities on August 7th amidst suspicions of orchestrating an extensive multi-million dollar fraud. Shin’s arrest follows a detailed investigation into his activities, with allegations of embezzling funds from Bitsonic users’ investments and deposits.
According to South Korean news agency Chosun Biz, Shin stands accused of engaging in fraudulent practices that manipulated cryptocurrency prices and trading volumes on the Bitsonic platform. These actions reportedly resulted in the misappropriation of approximately 10 billion won (equivalent to $7.5 million) from exchange users spanning from January 2019 to May 2021.
The prosecution’s claims assert that while Shin oversaw Bitsonic’s operations, he refrained from purchasing cryptocurrencies during the same period. Despite liquidity challenges and withdrawal suspensions, he allegedly continued to provide cryptocurrencies to new customers.
Bitsonic, once an active player in the crypto exchange landscape, declared its cessation of operations in August 2021, attributing the decision to a combination of internal and external factors. This move was followed by the South Korean authorities shuttering 11 domestic cryptocurrency platforms, citing suspicions of fraudulent conduct.
The investigation has also implicated the vice president of Bitsonic, alleging involvement in a plan to acquire the crypto assets held by Shin within the exchange system. Reports suggest that Shin employed a shell company established in Singapore as part of the manipulation scheme.
Coinciding with these developments, South Korean regulators have adopted a stringent stance against fraudulent activities in the digital asset industry. In recent initiatives, the Korea Securities Depository partnered with Code, specializing in Travel Rules, to advance the issuance and utilization of Legal Entity Identifiers (LEI) within the virtual asset market. This collaborative effort aims to combat illicit activities while bolstering investor protection.
Additionally, reports have emerged about the Korean government’s efforts to establish a crypto-tracking system geared towards thwarting cybercrime. As the investigation into Bitsonic’s alleged fraud continues, South Korea’s resolve to uphold integrity within its digital asset sector remains steadfast.