Head of S Korea’s V Global Crypto Exchange Will Serve 25 Years in Jail for $2.3bn Fraud

Crypto Exchange South Korea

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Tim Alper

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Tim Alper

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Tim Alper is a British journalist and features writer who has worked at Cryptonews.com since 2018. He has written for media outlets such as the BBC, the Guardian, and Chosun Ilbo. He has also worked...

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June 26, 2023 06:55 EDT

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The CEO of a bogus South Korean crypto exchange that tricked some 50,000 customers out of a total of $2.3 billion will spend the next 25 years behind bars – after the Supreme Court found him guilty of fraud.

Yonhap reported that the Supreme Court dismissed an appeal from the CEO of the V Global exchange, surnamed Lee, and upheld the high court’s guilty verdict.

Although the “exchange” had been designed to look every bit like a bona fide trading platform – replete with a website that featured real-time coin tickers – the court learned that it was anything but.

Lee masterminded V Global. But the court heard that he had previously used crypto-themed multi-level marketing tactics to dupe investors at another, now-defunct exchange.

The V Global exchange used a “tiered membership system.” It promised members payouts in the platform’s own tokens for recruiting new members. These coins later turned out to be bogus, too.

The platform was operational between July 2020 and April 2021, the court heard.

V Global offered promises of 300% growth on customers’ initial stakes. But police eventually stepped in after groups of angry investors came forward in 2021, complaining that they could not withdraw tokens or fiat from the platform.

CEO to Serve 25 Years as Other Bogus Crypto Execs Await Final Verdict

Lee and a number of V Global senior executives were tried last year. Senior executives were jailed for between four and 14 years – with the company’s second most powerful executive (after Lee) given an eight-year term late in 2022.

Most of the executives – besides Lee – were tried together.

At Lee’s first (district court) trial, the CEO was given a 22-year prison term – although prosecutors and groups of victims had pushed for a maximum life sentence.

The case was then reviewed by the high court, which increased Lee’s sentence to 25 years and ordered him to pay a fine worth over $8 million.

The Supreme Court – the highest in the land – upheld the high court’s verdict on January 13, confirming that the high court had been correct in its interpretation of the law.

The court heard evidence of how Lee had used “sophisticated” “pyramid scheme” methods to ensure that older “members” of the exchange were paid with money provided by newer “recruits.”

The high court is currently in the process of reviewing the cases of the remaining V Global executives. The group has been found guilty of “destroying evidence” and “interfering with police investigations” – in addition to fraud-related violations.