Executives from $1.5B South Korean crypto exchange fraud jailed – Reports

by | Dec 31, 2022 | News, World | 0 comments

Do Kwon, the South Korean inventor of the bankrupt cryptocurrency Terra, has denied being on the run after Singapore detectives indicated he was not in the city-state as previously assumed. Kwon’s whereabouts have been called into doubt following a late-Saturday statement from Singapore police, and his tweets have not revealed where he is. Terraform Labs’ failure earlier this year resulted in the loss of around $40 billion in investor funds. Kwon has been accused of fraud by five South Korean investors; he is being probed by a financial crimes unit and the Securities and Exchange Commission in the United States.

On Wednesday, a South Korean court issued an arrest order for Kwon. He tweeted early Sunday, “I am ‘not on the run’ or anything related,” but did not specify where he was. He stated that they are fully cooperating with every agency that has shown a desire to connect, and that they have nothing to conceal.

They are defending themselves in many jurisdictions and hope to prove the truth in the coming months. Previously, the 31-year-old was assumed to be in Singapore, where he gave his first media interview since the crypto operator declared bankruptcy in May. “Do Kwon is now not in Singapore,” the Singapore police agency stated in an email late Saturday.

“SPF will help the Korean National Police Agency (KNPA) in accordance with our domestic regulations and international commitments,” the short statement added, without going into further detail. According to the Straits Times, Kwon’s work visa in Singapore was set to expire on December 7, but his application for renewal may now be jeopardized.

Prosecutors in South Korea have also issued arrest orders for five additional persons associated with the stablecoin TerraUSD and its sibling cryptocurrency Luna. Kwon’s Terra/Luna system imploded in May, with the prices of both tokens dropping to near zero and the repercussions affecting the broader crypto market. Its demise resulted in losses of more than $500 billion.

Stablecoins are intended to be reasonably steady in price and are typically tied to a real-world commodity or money. TerraUSD, on the other hand, was algorithmic, utilising programming to keep its price around one US dollar. Many investors lost their life money when the Luna and Terra crashed, and South Korean authorities have launched various criminal investigations into the catastrophe.

Executives implicated in a $1.5 billion cryptocurrency exchange fraud in South Korea have been imprisoned

The current court decision brings the total number of V Global executives behind bars to seven, after the CEO was previously sentenced to 22 years in jail. Six executives implicated in the $1.5 billion (2 trillion won) South Korean crypto exchange scam V Global were sentenced to up to eight years in jail, although three were not arrested so they could continue to fight charges in court. Between July 2020 and April 2021, V Global attracted over 50,000 investors by promising 300% profits as well as large bonuses for referring new consumers.

According to a translation of December 26 stories from South Korean media sites such as Economist.co.kr, two high-ranking executives, Mr. Yang and Mr. Oh, were sentenced to eight and three years in prison, respectively, for their roles in cheating investors. Another four anonymous executives were sentenced to three years in prison and five years on probation. Three of the six have not yet been jailed because they have claimed innocence and have the right to defend them in court.

“The defendants exclusively trusted the VGlobal management team, avoided accountability, and once the inquiry began, they destroyed evidence and interfered with the investigation,” stated the judge from the 12th Criminal Division of the Suwon District Court. The judge, on the other hand, was said to have been kind with the defendants because the real amount of fraud and number of investors affected was smaller than first estimated last year. According to Kyeongin’s February reporting, this was due to later evidence indicating that about 10,000 investors had received returns from V Global through payments from multilevel marketing incentives such as customer recruiting bonuses.

Many are alleged to have re-invested their winnings before the portal was shut down. It was claimed in June of last year that the company had paid out $1,000 customer referral incentives to current investors via the infusion of funds from new users in a Ponzi-like method. The recent court action takes the total number of V Global executives behind bars to seven, following the February conviction of the CEO, known as Mr. Lee, for 22 years in prison.