A CEO from South Korea has received a five-year prison term for misusing $2.4 million worth of Ethereum (ETH) belonging to a collaborating firm.
According to the news source Delight, the 43-year-old executive, known by his last name Chae, leads a marketing firm specializing in cryptocurrency funds.
The Seoul Northern District Court revealed that Chae’s firm was in partnership with a telecommunications and broadcasting company involved in the blockchain sector.
This telecom company possesses a unique patent for blockchain-enabled mobile communication resource sharing and initiated a “reverse” initial coin offering (ICO) through Chae’s marketing agency.
This reverse ICO succeeded in collecting approximately 38,099 ETH from its investors, with the funds being overseen by Chae’s enterprise.
Man ‘Made Dozens of Unauthorized ETH Transfers
The court was informed that in October 2018, Chae started transferring portions of these ETH assets to accounts of another business he controlled. Initially, he moved 300 ETH, but over numerous transactions, this amounted to a transfer of 21,245.99 ETH.
The prosecution also alleged that Chae converted some of these coins to cash and then shifted them to wallets under his wife’s name. However, these claims were dismissed by the judge.
The judge further turned down the mobile communication company’s pleas for restitution. He opined that in specific cases, it was implausible to assume Chae operated independently and without the knowledge of the mobile communication company.
However, the judge did determine that Chae breached the Act on the Aggravated Punishment of Specific Economic Crimes, a law that was updated in 2020 to encompass cryptocurrency-related regulations.
In the previous year, another individual was handed a five-year prison sentence after deceiving victims of roughly $1.7 million in Bitcoin (BTC) and ETH. This individual falsely advertised a blockchain-based platform for webtoons, digital comics that have a significant following in South Korea.
Additionally, in 2020, authorities disbanded a deceitful “Ethereum wallet”-centered multi-level marketing scheme. The brains behind this operation successfully collected $44.5 million from nearly 3,000 unsuspecting individuals.
