8 People Including CEO of Coin Issuer Involved in Gangnam Kidnapping and Murder Indicted

Eight individuals, including the CEO of the issuing company, have been brought to trial on charges of manipulating the price of the FurEver coin, which was the trigger for the kidnapping and murder case in Gangnam last March.

On the 24th, the Seoul Southern District Prosecutors' Office's Joint Investigation Team on Virtual Asset Crimes (Head Lee Jeong-ryeol) announced that it had indicted Lee (58), CEO of Uninetwork, the issuer of FurEver coin, and eight others including a professional price manipulator known as A, on fraud charges. FurEver is a coin related to air purifiers issued under the pretext of promoting a fine dust reduction project.

According to the prosecution, Lee and others are accused of conspiring to artificially inflate the price of FurEver coin through false disclosures and price manipulation from April 28 to May 6, 2021, then selling the coins, deceiving about 6,100 members of virtual asset exchanges and embezzling approximately 21 billion KRW.

The prosecution found that Lee and B, the CEO of a coin consulting firm, transferred 55.2 million coins to a three-person price manipulation team and A for the purpose of price manipulation, but falsely disclosed that these were properly provided to partner companies for the 'fine dust reduction project' of the FurEver issuing company. Lee and B were introduced to these parties by a coin market broker.

Additionally, the prosecution identified that the price manipulation team and A employed C, a price manipulation technician, to carry out wash trading and matched orders as part of the price manipulation.

When the price manipulation team received a request for price manipulation work from the issuing company, they re-commissioned A, who then instructed technician C to execute the plan. The price manipulation team members had prior experience listing coins on exchanges in 2019 and were previously arrested and indicted on October 13 at the Seoul Central District Prosecutors' Office for special robbery charges involving coercion of a gallery owner to return art investment profits by mobilizing MZ gangsters.

Professional Operators Use Wash Trading Bots for Price Manipulation

Source: Seoul Southern District Prosecutors' Office

This investigation marks the first time prosecutors have confirmed that professional price manipulators are employed in the coin market, similar to the stock market. Lee and A conspired through introductions by coin brokers, agreed on profit-sharing ratios from price manipulation, and settled profits five times during the manipulation period. The profit distribution was structured so that the issuing company took 40% of total profits while the price manipulators took 60%.

Despite the coin-related program being commercially unfeasible, Lee and others heavily disclosed information during the manipulation period as if the program had reached commercialization, using this to temporarily boost the coin price.

They also employed price manipulation techniques exclusive to coin trading. The issuing company, under the guise of testing, locked up electronic wallets they controlled to block coin inflows to exchanges. Then, through so-called 'cage pumping,' they easily induced price increases by manipulating prices while the circulating supply was limited.

Furthermore, they utilized wash trading programs known as 'wash trading bots.' The prosecution confirmed through coin trading volume analysis that the average daily trading volume during the manipulation period increased more than 400 times compared to before. During a raid on C's office, prosecutors witnessed the 'wash trading bot' in operation. They also found that the group used VIP accounts on exchanges, which offer fee discounts to members with certain trading volumes, enabling them to conduct wash trades without bearing transaction fees.

It has been confirmed that the defendants and victims involved in the Gangnam kidnapping and robbery-murder case were not involved in this incident. However, the prosecution is continuing to investigate whether these individuals conducted price manipulation at other times, separate from this case, in connection with the Gangnam kidnapping and robbery-murder.

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