Fraudulent Whitepapers and 'Ghost Coins' Lead to 14-Year Prison Sentence in 9.13 Billion Won Scam

Seoul Northern District Court recently sentenced eight individuals convicted of fraud, violation of the Electronic Financial Transactions Act, violation of the Specific Financial Information Act, violation of the Unlicensed Fundraising Act, and violation of the Criminal Proceeds Concealment Regulation Act to prison terms or suspended sentences. The two masterminds received 14-year prison sentences each. The head of the sales organization was sentenced to eight years in prison, while four other accomplices received sentences ranging from four to seven years. One individual involved solely in unlicensed fundraising was given a one-year sentence with a two-year probation period and 80 hours of community service.

The group created fake whitepapers and business plans by stitching together existing materials or other companies' documents, recruiting people to lend their names, and subsequently issuing and selling nearly 30 coins. Notably, when listing on overseas exchanges proved difficult, they manipulated the app to display coins as normally distributed without actually delivering them, while artificially inflating trading volumes through wash trades to make it appear as if the coins were being traded normally.