- Bitsonic CEO was accused of manipulating the firm’s computer systems.
- The controversy surrounding Bitsonic echoes the larger impact such scandals can have on regulatory decisions.
In a startling turn of events, South Korean police arrested, the CEO of Bitsonic crypto exchange, on charges of embezzling $7.6 million from user funds. The CEO was accused of manipulating Bitsonic’s computer systems from January 2019 to May 2021.
The alleged manipulation was done in order to artificially boost the prices and trading volumes of virtual assets. Such acts not only weaken the trust of Bitsonic’s user base, but also jeopardize the integrity of the market.
South Korean authorities crack down on crypto theft
The controversy also implicates Bitsonic’s vice president of technology. The VP will face charges of obstructing business operations. Interestingly, he will undergo trial without being held in detention. This sophisticated legal approach implies varied degrees of participation in the claimed violation.
The CEO’s actions appear to have gone beyond market manipulation. Prosecutors claim he stole $7.6 million, a mix of cash and virtual assets, to fund his plan.
Notably, even while Bitsonic suffered liquidity issues and was unable to execute investor withdrawals, the CEO allegedly continued offering cryptocurrency items to new clients, adding layers to the deceit.
For South Korea, a country heavily involved in the crypto world, these controversies could shape regulatory decisions, investor sentiment, and the overall perception of digital currencies. The unfolding Bitsonic saga uncomfortably reminds investors and crypto enthusiasts of the Terraform collapse.
Founded in 2018 by Do Kwon, Terra aimed to establish a decentralized finance network, utilizing TerraUSD and Luna for a stablecoin system. In a week of turmoil during 2022, Terra, alongside its token Luna, witnessed a dramatic collapse wiping almost half a trillion dollars from the cryptocurrency market.
South Korean authorities have also dismantled two cryptocurrency scams that defrauded victims of $350 million. One scheme involved a fake virtual fashion marketplace, tricking 435 victims out of $333 million, potentially affecting 6,084 people.
The CEO and VP of the marketplace were charged with fraud. The platform promised a 316% return on investments and utilized a pyramid structure.
Police noted that Gangnam was a prime target for these scams. They also arrested another individual who allegedly targeted housewives and office workers in a crypto scam.
