Fake cryptocurrency exchange operator not guilty
A cryptocurrency exchange operator surnamed Lee, who was accused of taking 47 billion won from clients and using the funds for his own investments, was found not guilty by the Seoul Central District Court. The court said it could not precisely identify the victims and the damages, and that no specific details were available on the alleged embezzlement at the Eyabit exchange. Juggling client money The Eyabit exchange was formed 2016 and had around 40 employees and 31,000 members, which made it the 10th largest of its kind in Korea. But accordingto prosecutors, Eyabit was a fake cryptocurrency operator that just posted quotes and rates to make it seem as though transactions were taking place. The system made it appear that cryptocurrency was being purchased with client funds, but Lee was simply taking the money as it came in, the complaint said. When users would make a withdrawal, Lee would simply use incoming funds from others. Prosecutors indicted Lee and arrested him for taking 32.9 billion won from retail clients in June and 14.1 billion won from corporate clients and using the money for his own investments and living costs. Lack of evidence The court found Lee not guilty of using the 32.9 billion won deposited by his clients for his own purposes. Although the court agreed that Lee misappropriated 14 billion won, it said his reason for embezzlement was not clear."Evidence is lacking to verify whether Lee used money from his clients for other purposes based just on the evidence submitted by prosecutors, and no more specific details were found on the victims," the court said in ruling. Also, no breach of duty The court also said that Lee did not breach the contract to supply bitcoin to individual clients. "Prosecutors said Lee took around 2,200 bitcoins from his corporate clients but failed to nail down the transaction details, when it happened and how many times it happened," the court said. "The indictment is not valid as it is not clear how much he benefited from doing so." Suspended sentence for not giving severance pay But the court gave Lee a suspended jail sentence for not giving severance pay to his employees and for other human resources-related infractions. "We took into account that Lee didn't purposefully deny severance pay," the court noted.