South Korea condemns CEO for manipulating cryptocurrency price.

• South Korea punishes cryptocurrency market manipulation.
• CEO arrested for inflating token volume.
• Law on virtual assets debuts with landmark conviction.

A South Korean court sentenced the CEO of a local cryptocurrency management company to three years in prison for manipulating the price of a digital token. The decision marks the first practical application of the Virtual Asset User Protection Act, in effect since July 2024.

The sentence was handed down by the Seoul Southern District Court. The lawsuit alleges that the executive, identified as Jong-hwan Lee, carried out operations designed to artificially distort the market. According to the lawsuit, he obtained illicit gains equivalent to 7,1 billion South Korean won.

In addition to the prison sentence, the court ordered the payment of a fine of 500 million won and the confiscation of approximately 846 million won in assets related to the illegal activities. Despite the conviction, the judge chose not to order immediate imprisonment, citing the defendant's behavior during the trial.

Investigations revealed that, between July and October 2024, Lee used an automated trading program to inflate volumes and execute simulated transactions. The practice was allegedly aimed at creating the impression of strong demand for the ACE cryptocurrency, raising its market price.

Data presented in the proceedings indicates that the average daily trading volume of the token was approximately 160 units before the alleged manipulation. After the start of automated operations, this number jumped to about 2,45 million units, with Lee allegedly responsible for a large part of the activity.

"This is a serious crime that prevents the formation of fair prices in the virtual asset market and undermines investor confidence."

The court confirmed this in the translated news report.

"A severe punishment is necessary, as he has shown neither an understanding of the seriousness of his actions nor remorse."

Another individual involved, Min-cheol Kang, a former employee of the same company, received a two-year prison sentence with three years of probation. The court determined that both acted together to manipulate the cryptocurrency market.

Although the prosecution alleged total profits of 7,1 billion won, part of that amount was disregarded due to insufficient evidence. Nevertheless, the decision sets a relevant precedent for the oversight of the cryptocurrency market in the country, amidst the development of new regulations for the sector.