A South Korean court has sentenced the CEO of a cryptocurrency company to three years in prison for manipulating crypto prices.
The ruling marks the first prison sentence under the Virtual Asset User Protection Act, which came into effect in July 2024. It is also the country’s first conviction for virtual asset price manipulation under the new law, a crime that they had previously had difficulties punishing.
According to legal sources, the court sentenced Lee, the CEO of a cryptocurrency trading company, to three years in prison and fined him 500 million won and an additional surcharge of 846.56 million won.
The report shared that Lee repeatedly manipulated the price of the ACE token, which was listed on Bithumb. Between July 22 and October 25, 2024, he bought and sold the token at unusually high and low prices during rapid succession.
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The judges referred to this pattern as “hit trading,” which basically involves aggressive buying and selling at extreme prices, with no legitimate investment purpose.
The court stated that such trades were designed to inflate the trading volume rather than actually generate investors’ real profits. A former employee, identified as Kang, was also indicted alongside Lee and has received a two-year prison sentence and three years probation.
Court Clarifies Boundaries for Crypto Trading Practices
So far, the court has ruled that this tactic trading system misled other traders into believing there was significant market interest in the token.
However, the court dismissed the prosecution’s claim that Lee earned 7.1 billion won in illegal profits, as the judges said the calculation included transactions not listed in the indictment and lacked accurate data on trading amounts and commissions.
So far, the legal experts expect the new ruling to have a major impact on South Korea’s cryptocurrency industry. The decision clarifies that practices such as hit trading and artificially boosting trading volume are illegal under the new law and may lead to criminal punishment going forward.
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