The Seoul Southern District Court sentenced crypto firm CEO Jong-hwan Lee to three years in prison for manipulating the ACE token price.
South Korean regulators are once again tightening their grip over the crypto market and the rising corporate involvement. A South Korean court has recently sentenced the CEO of a crypto asset management firm to a 3-year jail term for minting a total of $4.8 million by manipulating token prices.
South Korean Court Sentences Crypto Firm CEO Over Violations
Local news publication Hankyung recently reported that the Seoul Southern District Court has sentenced crypto executive Jong-hwan Lee on charges of violating the Virtual Asset User Protection Act.
Reportedly, the court has imposed a prison sentence on Lee, along with a fine of 500 million won. Besides, the court has also ordered Lee to forfeit roughly 846 million won in criminal proceeds.
Prosecutors said that between July 22 and Oct. 25, 2024, Lee had used an automated trading program to manipulate the price of the ACE cryptocurrency. The program allegedly inflated trading volumes through repeated wash trades. This allowed Lee to illicitly mint profits of 7.1 billion won, aka $4.8 million.
According to investigators, the token’s average daily trading volume stood at about 160,000 units before the scheme began. After Lee deployed the automated program, volume jumped to roughly 2.45 million units the following day. Lee’s trades had accounted for approximately 89% of the activity. According to a translated news report, the court stated:
“This case is a serious crime that obstructs the fair price formation of the virtual asset market and undermines investor trust.”
Using AI to Address Crypto Manipulation
Top South Korean regulators are now stepping up efforts to combat crypto market manipulation. The country’s top financial regulator, Financial Supervisory Service (FSS), said that it would be using artificial intelligence (AI) surveillance tools to upgrade its Virtual Asset Investigation System (VISTA). This comes soon after the South Korean customs department exposed a $100 million crypto-remittance network last month in January.
According to officials, the enhanced system will automatically identify pump-and-dump schemes. Moreover, it would track coordinated trading networks and trace illicit fund flows across platforms.
The upgrade also includes the introduction of GPU-powered servers. This will allow regulators to process large volumes of market and transaction data more efficiently. Authorities said the improvements are aimed at strengthening real-time monitoring of digital asset markets.
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