Seven Coinup executives were sentenced to 6 to 16 years in prison. The Korean exchange was accused of running a Ponzi scheme that caused $ 386 million in damages.
According to reports published by Yonhap News, Coinup CEO Kang Seok-jung (known as Cash Kang) has been sentenced to 16 years in prison. The vice president of the exchange was sentenced to 7 years, while other executives were sentenced between 6 and 11 years.
The investigation by the South Korean authorities showed that the exchange promoted a fraudulent investment scheme, which promised 200% returns over a period of 4-10 weeks.
The court ruling noted that some of the blame belongs to Coinup investors, who did not carry out the necessary checks on the exchange. According to the judge, if the population continues to believe in promises of exaggerated profits, people will continue to be victims of such elaborate scams.
“Greed and desire to make massive profits makes them easy prey for unscrupulous individuals”
is mentioned in the court decision.
Periodic checks at the exchange
South Korean authorities have begun to pay more attention to cryptocurrencies in recent years. Many participants in the crypto market argue that strict rules cause many projects to leave this jurisdiction.
In 2018, for example, police conducted frequent raids on crypto exchanges in South Korea. Since then, the authorities have implemented rules such as KYC / AML checks for companies that run cryptocurrencies in South Korea.