Crypto is innovative, but at the same time, it involves crimes and fake price movements that have resulted in the loss of millions worth of assets. Recently, a South Korean court sentenced a crypto CEO to three years of imprisonment to a crypto CEO, who is alleged to have earned unfair profits through price manipulations.
South Korea’s Virtual Asset User Protection Act picks its first case
Jong-hwan Lee, the CEO of a South Korean crypto asset management firm, has reportedly earned $4.88 million worth of Korean won, which is equal to 7.1 billion Korean won, through crypto manipulation. The Seoul Southern District Court issued the verdict for imprisonment, in addition to a fine of 500 million won. The court also announced that the government can confiscate 846 million won that the CEO illegally earned.
The court ruling is quite important because it is considered the first case under South Korea’s Virtual Asset User Protection Act. The comprehensive digital asset framework came into effect in July 2024 with stricter rules for virtual asset service providers (VASPs). The act intends to protect consumers’ assets, knock down illegal trading and unfair practices, monitor suspicious transactions, and more.
AI to crack down on crypto manipulation
South Korea’s Financial Supervisory Service recently rolled out an AI model to monitor price manipulation in cryptocurrencies. The AI-enhanced surveillance system, called VISTA, is designed to detect coordinated trading activity and unusual patterns as part of the country’s broader regulatory push.
Earlier, detectors or analysts had to watch for any suspicious activities using manual techniques. However, this AI upgrade scans huge amounts of data and finds any manipulations quickly.
Token manipulation is not a new game
Gaining profits through illegal token manipulation is not a new game in the crypto industry. Michael Kane and Shane Hampton of Hydrogen Technology Corporation manipulated the price of HYDRO tokens, for which they received nearly six years of imprisonment in the US.
Alexander Mashinsky, founder of Celsius Network, received a 12-year imprisonment for securities and commodities fraud. He has allegedly misled investors and engaged in activities like inflating the value of the Celsius token, CEL.
