Inmates jailed for a $1.5 billion South Korean cryptocurrency exchange fraud

Given that the CEO of V Global was previously given a 22-year prison term, the most recent legal action has resulted in seven V Global executives being imprisoned.

Three executives were not detained so they could defend themselves against certain charges in court, but six executives involved in the $1.5 billion (2 trillion won) South Korean cryptocurrency exchange fraud V Global have received prison sentences of up to eight years.

Between July 2020 and April 2021, V Global was in operation. It attracted about 50,000 investors by promising 300% returns as well as sizeable payments for referring new clients.

Two senior executives, Mr. Yang and Mr. Oh, received eight years and three years in prison, respectively, for their roles in defrauding investors, according to translations of Dec. 26 reports from South Korean media outlets like Economist.co.kr.

Five years of probation and three-year sentences were given to four additional unnamed executives.

However, three of the total six have not yet been imprisoned because they have asserted their innocence in relation to certain accusations and have the right to legal representation.

The judge from the 12th Criminal Division of the Suwon District Court stated, "The defendants only trusted the VGlobal management team, evaded responsibility, and once the investigation started, they destroyed evidence and interfered with the investigation."

However, the judge reportedly showed the defendants some leniency because the actual scope of the fraud and the number of investors affected were less than first believed the previous year.

This was due to later evidence showing that approximately 10,000 investors had actually received returns from V Global through payments from multilevel marketing incentives like customer recruitment bonuses, according to Kyeongin's reporting from February. Before the platform was shut down, many are said to have invested those profits back into it.

Back in June of last year, allegations surfaced that the company had paid out its $1,000 customer referral bonuses to existing investors in a Ponzi-like scheme using the money influx from new users.

Seven V Global executives are now incarcerated as a result of the most recent legal development; the CEO, known as Mr. Lee, was previously given a 22-year prison term.