Twice Burned: South Korean Crypto Exchange Boss Hit With 2nd Fraud Case

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Reports have disclosed that Shin Jin-wook, the chief executive of South Korean crypto exchange Bitsonic, has been handed a second prison term for a fresh fraud charge.

Based in Daegu, Shin was found guilty of manipulating trading data and misleading customers. He is already serving a seven-year sentence for misappropriating ₩10 billion (about $7.5 million) in deposits, and now faces more jail time over a smaller but still serious scheme.

Inflated Trading Volume And Misleading Announcements

According to the Daegu District Court, Shin used false trading figures to pump up the crypto market price of Bitsonic Coin (BSC). He lured customers with fake announcements and boosted “KRW points” through sham buybacks.

Those points then funded actual purchases of Bitcoin and Ethereum from platform users. Once Shin converted the crypto into cash, he poured money into unrelated firms.

The court found that this cycle netted him roughly ₩160 million ($115,000) in ill-gotten gains.

Investigators noted that Shin also gave investors a lock-up period guarantee. In reality, neither the investments nor the promised interest could be returned. When victims pressed for their funds, they discovered the promise was hollow.

Earlier Price Manipulation Conviction

In February 2024, Shin and Bitsonic’s chief technology officer, known only by the surname Bae, were sentenced to a combined eight years in prison for a separate fraud involving price manipulation.

Reports said that this earlier verdict stemmed from a Seoul District Court finding that both executives deceptively profited by inflating trade volumes. At that time, Shin settled with the two biggest victims, which the judge said helped merit a lighter sentence.

The February ruling emphasized that neither Shin nor Bae had prior convictions for similar crimes. Judge Seong Gi-jun noted that their lack of a criminal record and Shin’s partial restitution with major victims weighed in favor of a “lenient” approach under South Korean law.

Yet the sizable sums involved—₩10 billion in deposits and the recent ₩160 million—underscore the scale of trust these executives betrayed.

Questions Over Exchange Oversight

According to Digital Asset reports, professionals indicate that the crypto exchange Bitsonic situation points to loopholes in real-time observation of exchange operations.

Swollen volumes and unverified lock-up assurances are likely to go undetected without more robust on-chain analytics. Customer trust suffers every time a high-profile exchange scandal erupts.

Some traders are already demanding mandatory proof-of-reserves audits and transparent order books to help deter such abuses.

Featured image from FLETA, chart from TradingView

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