Police Send Cryptocurrency Exchange CEO to Prosecution in Custody for 2 Trillion Won Damage

[Image source=Yonhap News]

[Asia Economy Reporter Lee Jung-yoon] The operators of the cryptocurrency exchange 'V Global' and the CEO of V H, a company virtually the same as V Global, have been handed over to the prosecution.

On the 10th, according to the police, the Violent Crime Investigation Unit of the Gyeonggi Southern Provincial Police Agency arrested and sent to prosecution four people, including V Global CEO Lee and the operators, as well as the CEO of V H, on charges of fraud.

They are accused of requiring exchange members to open at least one account worth 6 million won as a condition for membership registration, and from August last year until recently, they received deposits totaling about 2.21 trillion won from approximately 52,000 members.

They reportedly attracted members by promising profits and various allowances, saying things like "Invest in virtual assets and guarantee a threefold profit of 18 million won within a few months" and "If you recruit other members, you will receive a referral fee of 1.2 million won."

Actual profits were paid out, but it was found to be a so-called Ponzi scheme, where earlier members were paid profits using money from later members.

When the police first raided the exchange's office in May, the number of victims and the amount of damage were estimated at about 40,000 people and 1.7 trillion won, respectively, but both the number of victims and the amount of damage increased through the investigation.

At the beginning of the investigation, the police applied for seizure and preservation of about 240 billion won in the exchange's accounts before indictment, and the court approved the application. Seizure and preservation is a court order that prevents the suspect from disposing of illegal proceeds subject to confiscation before a final judgment is made. The police have been investigating since receiving crime intelligence about this exchange in February of this year.

A police official said, "This is a typical multi-level marketing crime using a Ponzi scheme, and members at the top of the multi-level structure can be seen as accomplices in the crime, so about 50 people have been booked and are under investigation," adding, "We will continue to investigate additional crimes related to the four people sent to prosecution this time."

This content was produced with the assistance of AI translation services.