South Korea: Top executives of scam V Global exchange convicted

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Six individuals identified as top-level executives in the defunct V Global have received varying degrees of jail time for their role in the debacle.

A report from Economist.co.kr revealed that C-level executives, only known as Mr. Yang and Mr. Oh, were given eight and three years in jail, respectively. Four other key operatives received three years each for their involvement in the scheme that robbed investors of $1.5 billion.

Three individuals contesting the court’s decision have been released on bail “to defend themselves,” while the other convicted individuals appear to have accepted their fate. The court stated that the accused were found guilty of violating the provisions of the Act on Aggravated Punishment of Specific Economic Crimes.

“The defendants only trusted the V Global management team, evaded responsibility, and once the investigation began, they destroyed evidence and interfered with the investigation,” read the judgment from the 12th Criminal Division of the Suwon District Court.

Given the sentences, some commentators have opined that the court’s decision was lenient given the scale of fraud perpetrated by the convicts. Police investigations disclose that almost 100,000 investors fell victim to the scheme, being roped in by claims of impressive returns of 300%.

The total amount raised from victims was pegged in the region of $1.5 billion in the window the scheme operated. V Global began operations in July 2020 before shutting down less than a year later in April 2021.

The latest tranche of convictions brings the total number to seven as early in the year, the firm’s CEO, named Mr. Lee, received a 22-year sentence. The presiding judge noted that the court “cannot help but punish the defendant severely” because the nature of his crime threatened the existence of the nascent digital asset industry.

It’s been chaos in South Korea’s ecosystem

The local scene in South Korea has endured a turbulent year marked by high-profile collapses that forced greater regulatory scrutiny on the industry. It began with the ill-fated collapse of Terra that left thousands of investors holding empty bags as the local ecosystem continues to reel from the effect of the implosion.

Law enforcement raided the offices of 25 traders alleged to be profiting illegally from trading BTC, sending a chill in the hearts of South Korean traders. As the year rolled to a close, the Virtual and Crypto Assets Exchange Association (JVCEA) was dragged to court over the delisting of WEMIX for virtual currency exchanges in the country.

In the weeks following Terra’s collapse, law enforcement carried out surprise raids on the offices of virtual currency exchanges while legislators scrambled to create tighter legal frameworks for the industry.

Watch: The BSV Global Blockchain Convention panel, Law & Order: Regulatory Compliance for Blockchain & Digital Assets