South Korean Court Sentences Illegal XRP Exchange Operator to Eight Years in Jail
An unidentified operator of an illegal XRP exchange in South Korea has been sentenced to eight years in prison after scamming investors out of nearly $3.4 million. Prosecutors revealed in a trial at the Seoul High Court that the operator stole approximately $2 million from one individual. The court upheld the ruling of a previous trial at the Seoul District Court, which had sentenced the operator to 12 years in prison, as reported by Namdo Ilbo. However, the High Court judge decided to reduce the sentence due to the operator’s efforts to compensate one of the victims. The operator now has the option to accept the verdict or appeal to the Supreme Court.
According to the High Court, the accused became the CEO of a domestic cryptocurrency exchange in 2015. The exchange falsely claimed that it had entered into a formal supply agreement with Ripple, the issuer of the XRP token. The court heard that an individual referred to as B sent the exchange fiat currency valued at around $2 million in 2015. The CEO informed B that they could purchase the coins at a 20% discount from the market rate but persuaded them to keep the coins on the exchange’s platform.
In 2017, the exchange informed B that they could increase their holdings of XRP from 2.35 million to 3 million within three months by lending the coins to another victim, referred to as C. At the time, the coins were valued at approximately $700,000. The CEO also defrauded another investor, identified as D, by convincing them to lend XRP coins in a loan agreement. Instead of repaying the loan, the CEO traded D’s XRP for Bitcoin and transferred the BTC to a wallet registered under his son’s name.
The court acknowledged that the victims had suffered significant losses and were unable to recover most of their lost coins and fiat currency. Witnesses also testified that the CEO had attempted to persuade them to give false statements to absolve him of guilt. Furthermore, the CEO evaded justice by requesting a postponement of the sentencing date and time to compensate for the damages. He took advantage of the granted requests to flee and went into hiding, only to be rearrested two years later.
The presiding High Court judge stated during the sentencing that in February 2023, the CEO of a fraudulent crypto bank received a 10-year prison sentence for defrauding thousands of South Korean investors out of a total of $181 million. Additionally, in January 2023, the Supreme Court sent the head of V Global, another fraudulent crypto exchange that scammed thousands of investors, to prison for 25 years. In February of this year, the head of another crypto exchange, Bitsonic, was sentenced to seven years in prison for price manipulation.
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