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South Korean Authorities to Arrest Crypto Exchange Head on Fraud Charges

A former cryptocurrency exchange chief is currently under investigation and custody in South Korea. Local media outlets have reported that Jinwook Shin, CEO of Bitsonic was caught by regulators recently.

He is facing charges of embezzlement and stealing from customer deposit accounts of the exchange platform. The incident was covered by Chosun Biz. The executive is also facing charges of manipulating prices at the exchange and misrepresenting trading volume on the Bitsonic exchange.

He is accused of mixing the funds valued at around 10 billion Korean won or $7.5 million out of the consumer pockets using the trading platform. Regulators have alleged that he siphoned the funds from January 2019 to May 2021.

Investigators have revealed in the court that Shin was operating Bitsonic but he did not purchase any cryptocurrencies during his tenure.


Cyber Crime Department to Bring Fraud Charges Against Shin

The cybercrime department of Seoul has brought a series of charges against the former CEO. The plaintiff has maintained that regardless of the liquidity crunch and withdrawal ban, Shin continued to offer the same cryptocurrencies to new account holders at the exchange.

The crypto trading platform in question seemingly shut down in 2021 August citing internal and external operational challenges. However, South Korean regulators cracked down on 11 local crypto exchanges bringing fraud charges against them.

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Investigators have included the former vice president of BitSonic in the allegations. He is charged with co-conspiring with the CEO of the crypto exchange for misappropriating cryptocurrencies within the exchange network. An inquiry has uncovered a shell company in Singapore operated by Shin to perform funds manipulation.

He and the vice president of BitSonic stand to face trial without preliminary detention. Further proceedings on this case may set a precedent regarding regulatory guidelines for the cryptocurrency sector in the country.

The government of South Korea has opted for an austere stance towards the cryptocurrency sector. Regulators are bringing charges against fraudulent crypto exchanges left and right and local crypto entities are under investigative grilling.

The Securities Depository of Korea filed for a partnership with Code that specializes in Travel rule implementation. Travel rule or bank secrecy act mandates information sharing between interlinked financial enterprises regarding funds transfers.

Code will work on issuing Legal Entity Identifiers or LEIs for DeFi. LEIs are unique ids for the legal transfer of financial transactions across the globe using a distinct LEI code. By working in tandem with Code, Korean regulators are seeking to curb illegal activities in the region in addition to implementing additional regulatory requirements on crypto platforms to protect the consumers.

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At the same time, regulators are also working on a crypto-tracking network as a way to push back against cyber crimes.

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Hassan Mehmood (Saudi Arabia)

Hassan is currently working as a news reporter for Tokenhell. He is a professional content writer with 2 years of experience. He has a degree in journalism.

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