A South Korean court handed a prison sentence to two executives of the crypto exchange Komid for faking exchange volumes and deceiving customers, according to a local media report by Blockinpress.
Hyunsuk Choi, CEO of the exchange, received a three-year jail term for his part in the crime, while Park Mo was sentenced to two years in jail. Choi was also convicted for the charges of embezzlement.
According to the court, in January 2018, Choi created a number of fake accounts on the exchange and created millions worth of fake transactions using trading bots. The digital asset and Korean won credited to these accounts were virtually created manipulating the system and did not exist at all.
The reports showed that around five million fake transactions were made to inflate the prices of the digital assets which brought in $45 million in fees.
Finalto Partners with BidFXGo to article >>
The court further convicted Chai for transferring Bitcoin from the exchange to an external wallet.
“Choi has committed fraud for a countless number of victims for a long period of time … Furthermore, he holds the financial authorities responsible for failing to keep track of the industry better” the court, preceded by the country’s top judge Ahn Seong-joon, said.
Is Order Manipulation a Norm?
Though this is the first case to get a conviction, this is certainly not the first time executives from South Korean exchanges were charged with fraud and manipulating the trading system.
Last month, the South Korean authorities charged four executives, including a board chairman and a financial director, one of the country’s top exchanges Upbit for manipulating transactions and creating fake orders worth 254 trillion won (around $226 billion). The same month, Bithumb was also accused of faking trading volumes which it denied later.