Six executives involved in the $1.5 Billion (2 Trillion Won) South Korean cryptocurrency fraud committed by V Global were sentenced to three to eight year prison terms. Three of those executives were not held to allow them to fight certain charges in court.
V Global was actively active between July 2020 – April 2021. During that time, it attracted approximately 50,000 investors with returns of 300% and large bonuses for bringing in new clients.
According to reports published by South Korean media outlets, Economist.co.kr on December 26, two high-ranking executives identified as Mr. Yang or Mr. Oh, they were sentenced to eight and three years respectively for their involvement in a scheme that defrauded investors.
The sentences for four other anonymous executives included three years in prison, five years probation, and five years each. Three of the six individuals have not been sentenced yet, however. They have maintained their innocence on specific charges and are exercising rights to defend themselves in courts.
According to reports, the court showed compassion to defendants because the true amount of fraud and number of investors that were affected was lower than was initially assumed.
According to Kyeongin’s February reporting, this was because subsequent evidence showed that around 10,000 investors had received returns from V Global via multilevel marketing incentives such as customer recruitment bonuses. It is believed that many users contributed substantial amounts to the site’s recovery before it was shut down.
The company claimed that it had paid out customer referral incentives worth $1,000 each in June 2013 to current investors. This was in a Ponzi-like manner using the flood of funds received from new customers.
V Global’s seven executives are now in prison due to the latest legal development. This is after Mr. Lee (the company’s CEO) was sentenced to 22 years imprisonment in February.
