Seven executives at Global V—a collapsed crypto exchange based in South Korea—were found guilty on February 11, 2022, with former CEO Lee Byung-gul receiving a total of 22 years in prison. They were accused of embezzling approximately US$1,900,000,000, involving 52,000 investors in a pyramid scheme that promised 300% returns.
Meanwhile, his accomplices were handed four to fourteen years of imprisonment, depending on their degree of involvement in the crypto fraud scandal.
With this recent verdict on the country’s biggest crypto scam, South Korea has potentially established a benchmark regarding the legal punishment crypto scammers may face if they are proven to be involved in crypto-related financial crimes.
However, a professor of information security at Dongguk University Hwang Suk-jin believes that the jail sentences given to the suspects are insufficient. He expressed that a similar case in the United States would have handed offenders 80 to 100-year prison terms since crypto frauds are considered to cause major mishaps in the economy.
‘In cases like these, the stolen money is usually hidden somewhere unknown. So the victims remain victims’, said Hwang.
On the other hand, an attorney representing some of the investors who were victimised by the fraud is quoted in the police report. According to Han Sang-jun, a lawyer of the Daegun law firm, stated that ‘Most of the victims were middle-aged or senior citizens who dreamed of a stable life after retirement.’
The lawyer disclosed that one of the 52,419 victims took their own life after getting scammed, while other investors managed to recover a portion of their digital assets. However, the report stated that the majority of the victims lost the entirety of their investments.
The prosecutors of the case revealed that V Global convinced crypto investors to use their platform by promising a guaranteed return of ₩18,000,000 if they sign up for an account with a balance of ₩6,000,000 in initial deposits.
V Global also reportedly ran a pyramid scheme-like operation where they guaranteed users ₩1,200,000 in commission if they successfully refer new investors to their platform.
‘There were a lot of cases where a family member or a close friend recommended V Global to another’, Han revealed.
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