South Korean prosecutors are seeking jail time for the executives allegedly responsible for a $651 million cryptocurrency scam. The scam left approximately 8,000 people out of pocket, with investors unable to reclaim their money. The trial is currently underway at the Seoul Southern District Court, and the prosecution is pushing for prison terms of up to 15 years for the involved individuals.
The Alleged Scam
The scammers operated through a platform called OnNetworks, where they promised individuals “payouts” if they used cryptocurrency to pay their utilities bills. However, the firm failed to deliver on these promises, leaving investors unable to recover their funds. The alleged victims were led to believe that they would receive cashback-like returns of 4-9% on their payments through the platform.
South Korean prosecutors are seeking significant prison terms for the key individuals involved in the scam. The CEO of OnNetworks, surnamed Park, faces a potential 15-year sentence, while an executive named Kim could be sentenced to five years. The CEO of an OnNetworks affiliated company, surnamed Yeom, is also facing a potential 12-year jail term. The prosecution believes that these severe sentences will serve as a deterrent for future cryptocurrency scams.
The Trial Proceedings
At a recent hearing, around 10 of the alleged victims appeared in court, urging the judge to punish Park and the other executives. Park expressed remorse for his actions and requested two months’ time to restore the damages. On the other hand, Yeom denied direct involvement in the scam, claiming that the events occurred outside of his scope of responsibility as a company executive.
In response to the increasing prevalence of crypto-related crimes, the Seoul Southern District Prosecutors’ Office established a dedicated cryptocurrency crime investigation unit. Comprising 30 investigators from various regulatory and law enforcement agencies, including the Financial Supervisory Service and the National Tax Service, the unit aims to tackle and prevent such scams more effectively.
The ongoing trial of the $651 million crypto scam in South Korea highlights the severity of crypto-related frauds and the need for stronger regulations and enforcement. Prosecutors are seeking significant prison terms for the executives behind the scam in an effort to deter future fraudulent activities. Meanwhile, the establishment of a dedicated cryptocurrency crime investigation unit demonstrates the authorities’ resolve to address such crimes more proactively. As the trial progresses, it remains to be seen how the court will hold these individuals accountable and what impact this case will have on the broader cryptocurrency landscape in South Korea.