Two executives from the one-year-old South Korean cryptocurrency exchange Komid have been jailed on charges that they inflated trading volume and falsified volume reports, according to recent reports from News Asia. The scheme reportedly included 5 million fabricated transactions designed to deceive investors, which enabled the duo to fraudulently earn about $45 million.
Komid CEO Choi Hyunsuk was given a three-year sentence. The other defendant was identified by his surname, Park. He received a two-year sentence after being accused of misconduct, fraud, and embezzlement. Park reportedly told the court how the duo carried out the scheme:
The defendant Park said about his accomplice, “Choi entered false orders, then we repeated the process and fooled investors into thinking the transactions were authentic, organic trades.”
In addition to the volume falsification, prosecutors also believe that the two men may have used a bot program to automate the creation of large, fake orders designed to attract new users to the exchange. The judge in the case cited the seriousness of Choi’s offense, while suggesting that he was trying to blame authorities for their failure to provide oversight. As Blockinpress reported, via Google translation:
"Choi has repeatedly committed fraud for many unspecified number of victims for a long period of time." The defendant blames the financial authorities for failing to repent of the mistakes and is transferring responsibility."