‘Multi-level Marketing’ Cryptocurrency Company CEO and Employees Sentenced to Imprisonment

[Asia Economy Reporter Kim Daehyun] The CEO and employees of a cryptocurrency company accused of embezzling billions of won from investors through a multi-level marketing scheme were sentenced to prison in the first trial.

According to the legal community on the 7th, Judge Jang Young-chae of the Seoul Central District Court Criminal Division 11 recently sentenced Kim (52), CEO of the cryptocurrency company Codirax, who was indicted for fraud and violation of the Act on the Regulation of Conducting Fund-Raising Business without Permission, to 5 years in prison and a fine of 2.2 billion won. Park (55), the head of the sales department, was sentenced to 4 years in prison and fined 100 million won, and the company was fined 100 million won. Park (48), a housing developer who was indicted in collusion with Kim, was sentenced to 4 years in prison and fined 1.1 billion won, and Kim (55), a computer developer, was sentenced to 2 years in prison and fined 400 million won.

Previously, from October 2018 to February of the following year, they were prosecuted for deceiving unspecified investors by promising to return 200 million won after one year if they invested 1 million won in their cryptocurrency "Y Pay." It was investigated that Y Pay operated as a multi-level marketing scheme where investors received commissions for recruiting other investors.

The court stated, "Monetary transactions and fraudulent acts conducted through multi-level marketing organizations produce numerous victims and involve large amounts of damage, shaking the foundation of sound economic activities in our society and disrupting economic order, causing significant harm to society as a whole." It also pointed out, "Most of the damages caused by the defendants' crimes have not been recovered, and the possibility of full recovery in the future seems low."

However, the court added, "Due to the profit-seeking structure of the multi-level marketing scheme, the victims also bear some responsibility," and "considering that the defendants confessed to most of the crimes and are showing remorse."

Meanwhile, the prosecution and Kim and others have appealed the first trial verdict.

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