Bitsonic’s CEO has been apprehended following allegations of orchestrating the improper transfer of $7.5 million in user funds.
The detainment comes as authorities investigate the circumstances surrounding the significant movement of these funds.
The cryptocurrency exchange’s users are left concerned about the security of their investments and are demanding transparency regarding the situation.
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Jinwook Shin Under Investigation By South Korean Authorities
On August 7, South Korean news source Chosun Biz reported that Jinwook Shin, the CEO of Bitsonic, a cryptocurrency exchange, had been taken into custody by the South Korean police.
The CEO is currently being investigated for allegations related to embezzlement of investments and deposits belonging to the exchange’s users.
In connection with the same case, the vice president of Bitsonic is scheduled to undergo a trial, although preliminary detention won’t be applied to them.
According to the allegations by the prosecuting authorities, between January 2019 to May 2021, Shin engaged in deceptive tactics by altering the cryptocurrency prices and trading volume on Bitsonic.
This scheme resulted in the misappropriation of approximately $7.5 million (equivalent to 10 billion won) from the exchange users.
Despite the emergence of liquidity challenges and the subsequent suspension of withdrawal services on Bitsonic, the CEO persisted in providing cryptocurrencies to fresh clients.
The investigation, which Commenced in 2021, additionally implicates the Vice President of the company, known in the media as Mr. A, in powering a program designed to acquire the cryptocurrency possessed by Shin within the exchange’s system.
To manipulate the situation, Shin leveraged a corporate entity established in Singapore, which served as a front for his activities.
In August 2021, Bitsonic ceased its operations, attributing the decision to internal and external challenges.
Coincidentally, South Korean law enforcement closed down 11 domestic cryptocurrency platforms due to fraudulent activities during this timeframe.
In a recent development, South Korea has taken steps to establish a collaborative investigative team spanning multiple agencies to tackle cryptocurrency-related offenses.
This initiative seeks to effectively counter the surge in unlawful actions within the cryptocurrency sector and enhance investor safeguards.
South Korea Targets Three Cities With Its CBDC Motive
The Bank of Korea is pushing forward with its CBDC pilot and has highlighted three notable regions where asset distribution will occur.
According to a report from a local media outlet in South Korea, Seoul, the country’s capital, is not included among the selected regions.
It was confirmed on July 31 that the Bank of Korea has selected Busan, Jeju, and Incheon as its candidates for the “private target CBDC test bed.”
As the report outlines, the bank will eventually choose one of the mentioned regions.
This choice will be coupled with trials involving public-level payments and distribution methods and establishing partnerships with franchises capable of processing payments through CBDC.
