South Korean Court Sentences Illegal XRP Exchange Operator to Eight Years in Jail
An individual operating an illegal XRP exchange in South Korea has been sentenced to eight years in jail for defrauding investors of nearly $3.4 million. The defendant, whose name has not been disclosed, was found guilty of stealing approximately $2 million from a single victim, as revealed during the trial at Seoul High Court.
The verdict of the Seoul District Court, which initially sentenced the operator to 12 years in jail, was upheld by the High Court. However, the judge in the High Court recognized that the operator had taken steps to compensate one of the victims, leading to a reduced sentence.
The operator now has the option to accept the verdict or appeal the judgment at the Supreme Court.
According to the High Court, the accused became the CEO of a domestic cryptocurrency exchange in 2015. The exchange falsely claimed that it had entered into a formal supply agreement with Ripple, the issuer of the XRP token.
The court heard that an individual referred to as B sent around $2 million worth of fiat to the exchange in 2015. The CEO informed B that they could purchase the coins at a 20% discount from the market rate, but convinced B to keep the coins on the exchange’s platform.
In 2017, the exchange informed B that they could increase their XRP holdings from 2.35 million to 3 million in three months by lending the coins to another victim, referred to as C. At the time, the coins were valued at around $700,000.
Another victim, named D, was also deceived by the CEO. Prosecution officials explained that the CEO tricked D into lending XRP coins, which were then traded for Bitcoin and sent to a wallet registered under the CEO’s son’s name.
The court acknowledged that the victims suffered significant losses through no fault of their own. Unfortunately, the police were unable to recover most of the stolen coins and fiat.
Witnesses testified that the CEO had attempted to persuade them to provide false statements to absolve him of guilt. He also attempted to evade justice by requesting a postponement of the sentencing date and claiming he needed time to compensate for the damages. During this period, he skipped bail and went into hiding, but was eventually rearrested two years later.
The presiding judge of the High Court stated during the sentencing that similar cases have been dealt with severely in recent years. In February 2023, the CEO of a fraudulent crypto bank was sentenced to 10 years in jail for defrauding thousands of South Korean investors out of a total of $181 million. In January 2023, the head of V Global, another fraudulent crypto exchange, was sentenced to 25 years in prison for defrauding numerous investors. Additionally, in February of this year, the CEO of Bitsonic, a crypto exchange, was jailed for seven years for price manipulation.
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