Illegal Ripple (XRP) Exchange Operator Sentenced to Eight-Year Prison Term in South Korea
An unidentified operator of an illegal XRP exchange in South Korea has been sentenced to eight years in prison for defrauding investors out of approximately $3.4 million. Prosecutors revealed in court that the operator stole roughly $2 million from one individual alone. The Seoul High Court upheld the ruling previously issued by a Seoul District Court, which handed the operator a 12-year sentence. However, the High Court judge reduced the sentence to eight years due to the operator’s attempts to compensate one of the victims. The operator now has the option to accept the judgment or file an appeal with the Supreme Court.
According to court documents, the accused became the CEO of a domestic cryptocurrency exchange in 2015. The exchange falsely advertised that it had secured a formal supply agreement with Ripple and Ripple Labs, the issuers of the XRP token. One victim, referred to as “B,” sent the exchange fiat currency worth around $2 million in 2015. The CEO convinced B to keep the coins on the exchange platform by offering them a 20% discount on the market rate. In 2017, the CEO deceived B into lending the coins to another victim, referred to as “C,” promising to increase B’s holdings from 2.35 million to 3 million XRP within three months. However, instead of fulfilling this promise, the CEO converted D’s XRP to Bitcoin and transferred the funds to his son’s registered wallet. The court highlighted that the victims suffered significant financial losses, and most of the lost assets remain unrecovered by the police.
During the trial, witnesses testified that the CEO attempted to manipulate them into making false statements to absolve him of guilt. Furthermore, the CEO fled before his re-arrest by requesting a postponement of the sentencing date and seeking time to compensate for the damages. The presiding High Court judge emphasized that the defendant showed no remorse and displayed a serious disregard for the law, warranting severe punishment.
This case comes amid South Korea’s efforts to combat the rising number of cryptocurrency-related crimes and fraud cases. The country is considering establishing a permanent virtual asset investigative unit to address these issues. The authorities have taken proactive measures, including the arrest of individuals involved in a fraudulent USDT OTC trade in the Gangnam district of Seoul. In recent years, South Korea has seen several high-profile cases involving fake crypto banks, fraudulent crypto exchanges, and price manipulation, resulting in lengthy prison terms for the perpetrators.