South Korea’s Prosecutors Wants to put Crypto Criminals Away for Life
While North Korean hackers had a field day siphoning funds from crypto exchanges in 2021, the seven people alleged to be responsible for the VGlobal crypto exchange scam in South Korea face the risk of life sentences.
The high-profile scam crypto exchange swindled over 52,000 investors of $2 billion.
Prosecutors eye Harsh Sentences for the Criminals
Reports from KBS suggest that the prosecutors will ask the court for life sentences for ringleaders of the scam. If the court agrees, it would be the first crypto scam case where the perpetrators get this kind of sentence.
Beyond the life sentences, the prosecutor will also be seeking fines ranging from $2 million for senior executives to $103.4 million for the CEO and mastermind of the crime.
According to the report, this is the first time that prosecutors have sought such harsh sentences for crypto crimes. It’s also very rare to request life sentences for financial fraud.
In 2016, a similar financial fraud got the mastermind just 25 years. Thus, the ruling in this one might set a precedent for the crypto sector and financial frauds generally.
VGlobal, the bogus crypto exchange at the center of this scam, is similar to other South Korean crypto exchange platforms in terms of appearance. It has a well-staffed office in Suwon, and its website contains the usual warnings about trading digital currencies like Bitcoin, Ethereum, and others.
However, prosecutors told the court that all of these are just a front being used by the criminals to deceive the public.
How VGlobal Perpetrated its Crypto Scam
Concerns about the exchange started when investors could not withdraw their funds from the platform. The exchange had asked people to invest at least $15,200 to join the exchange and that their ROI would triple their investments within a few months.
It also promised to airdrop its native tokens for investors each time a new coin was listed while also promising to reward them for bringing in new members.
But none of these promises came to pass. Evidence presented to the court by investors and prosecutors showed VGlobal was just a pyramid marketing scheme. The CEO, identified as Lee, has denied all allegations of wrongdoing, claiming that the company was already working on refunding investors.
As many other crypto scams, this event shows the need for regulations in the crypto space. A report by Chainalysis discovered that most crypto crimes in 2021 were crypto scams.