Two executives from V Global, a cryptocurrency exchange based in South Korea, were recently sentenced to prison for defrauding investors. Mr. Yang received an eight-year sentence, while Mr. Oh was given a three-year sentence.
According to court documents, four additional executives from V Global received five years of probation and three-year sentences. However, three of the six individuals have yet to be incarcerated as they have claimed their innocence regarding specific accusations and are entitled to legal representation.
The recent court action brings the total number of V Global executives who have been arrested to seven. The CEO of the exchange, Mr. Lee, was previously sentenced to 22 years in prison for being the primary organizer of the fraudulent activity.
V Global’s Ponzi Scheme
V Global, an exchange that operated from July 2020 to April 2021, reportedly promised investors returns of 300%. New customers were required to open accounts and deposit approximately 6 million Korean Won, with a guaranteed return of 18 million KRW promised to them.
V Global, which operated for one year, was able to attract approximately 50,000 investors by promising them a commission of 12 million KRW.
During the investigation, the defendants, who are being tried in the 12th Criminal Division of the Suwon District Court, were found to have disrupted processes and destroyed evidence in an attempt to avoid responsibility, according to a statement from the judge handling the case.
Many victims of the fraud reinvested the money they received from their initial investments, resulting in a lower total amount of damage compared to the legally defined amount of defrauded funds.
V Global Invest Legal Counsel, Daegun Law Firm, reported that the majority of the over 50,000 victims were middle-aged or older citizens seeking a secure retirement. The law firm also disclosed that at least one victim had taken their own life after being defrauded by the exchange.
FSC Begins Crackdown On Illegal Crypto Exchanges
The South Korea Financial Services Commission (FSC) initiated a crackdown on non-compliant local cryptocurrency exchanges in September 2021.
Related Reading | Bitcoin Holder Resilience To Be Tested, Says Peter Schiff
The crackdown resulted in the closure of several exchanges, putting investors in danger of losing assets valued at over $2.5 billion.
On September 28, 2022, the South Korean financial regulatory body and its partners emphasized the necessity of establishing a globally consistent regulatory framework for cryptocurrencies.