A significant development has occurred in the realm of cryptocurrency exchanges as Jinwook Shin, the CEO of Bitsonic, a prominent crypto exchange, has been apprehended by South Korean law enforcement on August 7th. The arrest comes in the wake of a grave investigation into alleged malfeasance involving embezzlement of investments and deposits from users of the exchange. It’s reported that the vice president of Bitsonic will also face legal proceedings but will not be subjected to preliminary detention.
Prosecutors have brought forth damning accusations against Jinwook Shin. They claim that over a span of approximately two years, from January 2019 to May 2021, Shin masterminded a scheme that involved the falsification of cryptocurrency prices and trading volumes on the Bitsonic platform. This manipulation is said to have resulted in the misappropriation of a staggering sum equivalent to 10 billion South Korean won, roughly translating to $7.5 million, from unsuspecting users of the exchange.
What makes this case even more alarming is the revelation that even as liquidity woes began to plague Bitsonic and withdrawal services came to a halt, the CEO continued to solicit investments and deposits from new clients, perpetuating the fraudulent scheme. This highlights a concerning breach of trust between the exchange and its users, as individuals were lured into the platform under false pretenses.
The investigation into this complex web of financial deception, which commenced in 2021, has also extended its focus to the involvement of the company’s vice president, identified as Mr. A. It’s alleged that Mr. A operated a program aimed at acquiring the cryptocurrency held by CEO Jinwook Shin within the exchange system. This intricate manipulation reportedly relied on a paper company that Shin established in Singapore.
Bitsonic operations
Bitsonic’s operations came to a screeching halt in August 2021, with the exchange attributing the shutdown to a combination of “internal and external issues.” Coincidentally, during the same period, South Korean law enforcement took a hardline approach against fraudulent activities within the cryptocurrency landscape, shuttering 11 local crypto platforms that were found to be engaged in illicit practices.
In response to the growing wave of cryptocurrency-related crimes, South Korea has taken measures to bolster its regulatory and investigative frameworks. The country has set up an interagency investigation unit specifically aimed at combatting cryptocurrency-related offenses. This initiative comes as a direct response to the surge in illicit activities that have plagued the market, causing financial losses to investors and raising concerns about the overall security and credibility of the cryptocurrency ecosystem.
