Double Trouble: South Korean Crypto Exchange CEO Faces Second Fraud Scandal

Another day, another crypto scandal—this time with a side of déjà vu.

South Korea's financial watchdog just slapped the CEO of a major crypto exchange with fraud charges... again. Because once apparently wasn't enough.

The Details:

- Same executive, new indictment. Prosecutors claim the pattern mirrors previous allegations—just with different victims this round.

- Zero specifics on damages (classic move), but insider whispers suggest the scheme involved 'creative' accounting with customer deposits.

The Irony:

This drops as Seoul pushes new crypto regulations to 'clean up' the industry. Because nothing says 'consumer protection' like letting repeat offenders run digital asset platforms.

Closing Thought:

Maybe third time's the charm for regulators to actually intervene before the exit scam? Nah—that'd require admitting their KYC rules work as well as a screen door on a submarine.

Inflated Trading Volume And Misleading Announcements

According to the Daegu District Court, Shin used false trading figures to pump up the crypto market price of Bitsonic Coin (BSC). He lured customers with fake announcements and boosted “KRW points” through sham buybacks.

Those points then funded actual purchases of Bitcoin and ethereum from platform users. Once Shin converted the crypto into cash, he poured money into unrelated firms.

The court found that this cycle netted him roughly ₩160 million ($115,000) in ill-gotten gains.

Investigators noted that Shin also gave investors a lock-up period guarantee. In reality, neither the investments nor the promised interest could be returned. When victims pressed for their funds, they discovered the promise was hollow.

Earlier Price Manipulation Conviction

In February 2024, Shin and Bitsonic’s chief technology officer, known only by the surname Bae, were sentenced to a combined eight years in prison for a separate fraud involving price manipulation.

Reports said that this earlier verdict stemmed from a Seoul District Court finding that both executives deceptively profited by inflating trade volumes. At that time, Shin settled with the two biggest victims, which the judge said helped merit a lighter sentence.

The February ruling emphasized that neither Shin nor Bae had prior convictions for similar crimes. Judge Seong Gi-jun noted that their lack of a criminal record and Shin’s partial restitution with major victims weighed in favor of a “lenient” approach under South Korean law.

Yet the sizable sums involved—₩10 billion in deposits and the recent ₩160 million—underscore the scale of trust these executives betrayed.

According to Digital Asset reports, professionals indicate that the crypto exchange Bitsonic situation points to loopholes in real-time observation of exchange operations.

Swollen volumes and unverified lock-up assurances are likely to go undetected without more robust on-chain analytics. Customer trust suffers every time a high-profile exchange scandal erupts.

Some traders are already demanding mandatory proof-of-reserves audits and transparent order books to help deter such abuses.

Featured image from FLETA, chart from TradingView