Seven executives of the collapsed South Korean scam cryptocurrency exchange, V Global, were recently given jail sentences as punishment for their role in misappropriating nearly $1.9 billion in investors’ funds, country’s biggest crypto frauds.
Former CEO Lee Byung-gul being sentenced to 22 years in prison and other six executives who are involved in the crypto fraud received 4 to 14 years, depending on their degree of involvement.
According to a report by Forkast, 52,419 investors lost their funds in the crypto scam, some of them their whole life savings, the jailing of Lee Byung-gul and his fellow executives comes a month after prosecutors had demanded life sentences.
However, South Korea’s verdict on the crypto scheme may set a benchmark for the legal punishment of scams targeting the newer, less traceable asset class.
“Most of the victims were middle-aged or senior citizens who dreamed of a stable life after retirement,” attorney Han Sang-jun of the Daegun law firm, who is representing the group of V Global investors, told Forkast.
The prosecutors revealed that V Global gathered investors by guaranteeing a 300% profit on a deposit of 6 million won (about US$5,000), which was the prerequisite for joining the digital exchange, Some investors did receive a portion of the promised return, but prosecutors said those funds had been taken from the deposits of newer customers.
“In cases like these, the stolen money is usually hidden somewhere unknown,” Hwang said, adding that the offenders do not take their civil liabilities to pay back seriously. “So the victims remain victims.”
Nevertheless, Han, the lawyer for V Global victims, says that even after serving time, their civil liabilities will remain intact — and more of the damages will be recovered after confiscating the hidden properties of the operators.
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