South Korean CEO Arrested for Alleged $7.5 Million Crypto Theft

Jinwook Shin, the CEO of South Korea's Bitsonic crypto exchange, has been taken into custody by the South Korean police.

The arrest, made on August 7, follows an investigation into allegations of his involvement in misappropriating $7.5 million of users' funds.

The local news outlet Chosun Biz has reported that Bitsonic's vice president is also implicated in the same case and will stand trial without pretrial detention.

South Korean prosecutors assert that Shin engaged in manipulative practices regarding cryptocurrency prices and trading volumes on the Bitsonic platform, spanning from January 2019 to May 2021.

This manipulation allegedly enabled the CEO to siphon approximately 10 billion worth (equivalent to $7.5 million) from users' deposits.

Shin purportedly executed these fraudulent activities through a shell company based in Singapore.

How did Bitsonic CEO steal user funds?

It's a bit like someone secretly adjusting the scales at a market to charge more for goods than they're worth.

The CEO apparently did something similar with the digital money on his platform, making it seem more valuable than it really was

Prosecutors further contend that even after Bitsonic encountered liquidity challenges and halted withdrawals, Shin continued to offer cryptocurrencies to new clients.

This investigation, which has been underway since 2021, also implicates Bitsonic's vice president, referred to as Mr. A. Prosecutors claim that Mr. A orchestrated a scheme to acquire Shin's crypto holdings within the Bitsonic system.

Notably, Bitsonic suspended withdrawal operations in August 2021, citing a combination of internal and external factors.

This development comes in the midst of a growing wave of fraudulent practices within South Korean exchanges, prompting the government to establish an interagency investigative unit.

To counter the increasing incidence of illicit activities in the cryptocurrency market, the government has set up a special investigation unit.

Launched on July 26, this initiative is dedicated to combatting crypto-related crimes and safeguarding investors from unscrupulous practices.

Moreover, plans by the Seoul Southern District Prosecutors Office to create a Joint Investigation Centre for Crypto Crimes, involving 30 investigators from seven government agencies, are already in motion.

This collaborative unit aims to enhance the efficiency of probing digital asset crimes by leveraging expertise in detection, handling, and analysis.