The CEO of a South Korean cryptocurrency exchange has been sentenced to 16 years in prison in connection with a multi-million dollar scam. According to local reports, several other people who held senior positions at the exchanges faced similar fate. The officials are accused of misleading investors into believing that they would receive guaranteed returns.
The Seoul Central District Court sentenced Kang Mo to 16 years imprisonment for the role he played in the multi-level pyramid crypto scheme, Korean outlet Yonhap revealed. Kang, who is also known as Cash Kang, was arrested on fraud charges in connection with the 450 billion won ($385 million) scam.
The court also sentenced some of the other officials to prison, including the two chief financial officers who will each serve 11 years in jail for their crimes. The company’s vice president was sentenced to seven years in prison, with other officials being sentenced to between six and nine years in prison.
The report revealed that the Coinup team had convinced its investors to invest in its native token, leading them to believe that the token would only appreciate in value. For those who invested in bespoke packages, they were promised a 200% return in 4-10 weeks. The company began selling its token in August 2018, before the scam was thwarted by the authorities in February.
To further convince the investors that the company was legitimate, Kang is alleged to have displayed a fake magazine on the workplace which contained a photo of him and South Korea’s president, Moon Jae-in.
However, Coinup was just a well-orchestrated pyramid scheme, the report revealed. The company used the money from investors in the latter stages to pay off the earlier investors, keeping a lot of the money to themselves as well.
“They created a plausible appearance, including a magazine with a current photograph of the current president. In the light of the consequences, the sin is serious,” the presiding judge stated. However, he was quick to point out that the victims also suffered because of their greed which made them invest in the company just because they were promised of guaranteed returns.
As CoinGeek reported just days ago, crypto scams are on the rise again, with the latest one targeting aspiring crypto millionaires on Facebook. The scam is being promoted through sponsored ads and promises the investors of guaranteed returns and financial freedom.
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