South Korea’s Bitsonic CEO bags extra 6 months on top of 7-year sentence over $7M fraud

Bitsonic’s CEO has bagged an extra six months in prison on top of his seven-year sentence handed down to him in 2024. The exchange executive ran afoul of South Korean authorities’ crackdown on fraudulent activity in the cryptocurrency industry.

Shin, the CEO of South Korean virtual asset exchange Bitsonic, who is already serving a 7-year sentence that was handed down in October of 2024, received an additional six-month prison sentence for a separate case of cryptocurrency fraud.

Bitsonic’s CEO receives an additional 6-month sentence

The Daegu District Court’s Western Support 1st Criminal Division, presided over by Judge Sung Ki-won, delivered the new sentence on July 18, following a second conviction involving manipulation of the virtual asset BSC (Bitsonic Coin).

The latest ruling found that Shin had orchestrated a scheme to inflate trading volume and manipulate the price of BSC in order to mislead investors and ultimately pocket significant amounts of customer funds.

This is the second confirmed fraud case tied to Shin, who previously faced prosecution for defrauding users of approximately 10B won, which is roughly $7M through artificially increased trading activity on the Bitsonic platform.

Court found continued abuse of the exchange platform

According to court findings, Shin induced users to trade BSC by making false statements, and subsequently took 160M won from investors.

To inflate the market and give the illusion of legitimacy, Shin reportedly utilized “false won points” to conduct buybacks of major cryptocurrencies such as Bitcoin (BTC) and Ethereum (ETH) from members.

However, instead of holding these assets on behalf of customers or returning them with promised interest, he diverted the funds to invest in companies unrelated to the Bitsonic exchange.

Furthermore, a lock-up product was offered by the exchange and was presented as a legitimate investment opportunity, but it was allegedly a cover to use incoming funds from new investors to fulfill withdrawal requests by earlier ones, a structure you’d expect of a Ponzi scheme.

In practice, this meant that many investors were unable to recover either their principal or any expected returns.

Despite these damaging actions, the court acknowledged that Shin had admitted to the charges and showed signs of remorse. Judge Sung stated, “Mr. Shin could not agree with the victims, but he admitted his mistake, reflected, and [we] decided on the sentence by combining the sentence conditions such as the motive and history of the crime.”

Shin’s seven-year prison sentence is one of the harshest yet handed down to a virtual asset executive in the country.

This second six-month sentence brings his total time in prison to seven and a half years. As of now, there is no public record of restitution to victims, and Shin has yet to reach any settlement or agreement with defrauded customers.