• Jinwook Shin, CEO of cryptocurrency exchange Bitsonic, was arrested by South Korean law enforcement on August 7th.
• He is being investigated for misappropriating investments and deposits from users of the exchange.
• The prosecution stated that Shin operated Bitsonic but did not purchase cryptocurrency during the same period leading to a misappropriation of approximately 10 billion won ($7.5 million) from exchange users.
South Korean Authorities Arrest Crypto Exchange Chief
Jinwook Shin, CEO of cryptocurrency exchange Bitsonic, has been apprehended by South Korean law enforcement on August 7th. He is currently being investigated for allegedly embezzling investments and deposits from users of the exchange.
Suspected Multi-Million Dollar Fraud Charges
According to the report by South Korean news agency Chosun Biz, Shin is being accused of fraudulently manipulating cryptocurrency prices and trading volume on Bitsonic, which led to the misappropriation of approximately 10 billion won ($7.5 million) from exchange users from January 2019 to May 2021. The prosecution stated that Shin operated Bitsonic but did not purchase cryptocurrency during the same period. But the CEO persisted in providing cryptocurrencies to new customers despite the onset of liquidity problems and the suspension of withdrawals on the crypto platform, Seoul’s cyber crime department alleged.
Bitsonic Shuts Down its Operations
BitSonic announced shutting down its operations in August 2021 and attributed the decision to “internal and external issues.“ Shortly thereafter, the South Korean authorities closed down 11 domestic cryptocurrency platforms for alleged fraudulent activities. The ensuing inquiry also claimed the involvement of company’s vice president in orchestrating a scheme to acquire crypto held by CEO within exchanage.
The investigation into BitSonic’s activities is ongoing at present and further details are expected soon as more information becomes available. This incident highlights again how important it is for exchanges to have proper procedures in place when dealing with user funds – especially when there are such huge amounts involved – as well as robust security protocols so that any suspicious activity can be identified quickly before it gets out of hand.
This incident serves as an important reminder that investors must remain vigilant when using exchanges or investing in cryptocurrencies as there are still many instances where unscrupulous actors can take advantage of unsuspecting people looking for quick returns or access their funds unlawfully if they do not properly vet their chosen platform or individual trader/investor beforehand.