A South Korean court has handed Jong-hwan Lee, CEO of a local crypto asset management firm, a three-year prison sentence for manipulating cryptocurrency prices to gain illegal profits. The Seoul Southern District Court ruled that Lee violated the Virtual Asset User Protection Act, earning roughly 7.1 billion Korean won, equivalent to about 4.88 million dollars, through price manipulation.
Court Decision and Penalties
Along with the prison term, Lee was fined 500 million won, or around 344,000 dollars, and required to forfeit roughly 846 million won, about 581,900 dollars, in criminal gains. He was not taken into custody during the trial due to his good conduct.
The court found that between July 22 and October 25, 2024, Lee used an automated trading program to inflate volumes and carry out repeated wash trades in the ACE cryptocurrency. Daily trading volumes jumped from about 160,000 units to 2.45 million units, with Lee responsible for nearly 89 percent of the activity.
A former employee, Min-cheol Kang, received a two-year prison term with three years probation. While the court confirmed manipulation occurred, it partially acquitted them regarding the 7.1 billion won total due to insufficient evidence.
This case is the first enforcement of South Korea’s Virtual Asset User Protection Act, which took effect in July 2024. Authorities are also investigating other digital asset issues, including the disappearance of Bitcoin estimated at 70 billion won, or 47.7 million dollars, from government-seized holdings.
