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South Korean Exchange CEO Sentenced to 16 Years in Prison

A South Korean district court has sentenced executives of a local crypto exchange to prison. The CEO of the exchange got a 16-year jail sentence while other executives and their accomplices got between six and 11 years. They duped thousands of investors, promising them up to 200% return within weeks.

Also read: Korean Presidential Committee Pushes to Legalize Crypto

Hefty Sentences for Crypto Exchange Executives

The Seoul Central District Court has reportedly handed hefty prison sentences to executives of local cryptocurrency exchange Coinup. Judge So Byeong-seok sentenced 53-year-old CEO Kang Seok-jung to 16 years in prison for committing fraud under the Act on the Aggravated Punishment, etc. of Specific Economic Crimes. In addition, the exchange’s CFO was sentenced to 11 years in prison while other executives and their accomplices got between six to nine years each. The executives were arrested in March on suspicion of investment fraud.

South Korean Exchange CEO Sentenced to 16 Years in Prison

Coinup’s executives duped about a thousand investors from August last year to February this year, local media detailed, adding that they collected approximately 450 billion won (~$386 million) from them. Yonhap News described:

They said that the value of the cryptocurrency they pointed to would increase significantly, and they said that if they invested in packaged products, they would pay up to 200% after 4 to 10 weeks.

South Korean Exchange CEO Sentenced to 16 Years in Prison
Coinup’s CEO arrested.

The Scheme

The executives lured people to invest in an unlisted cryptocurrency, convincing them that its value will skyrocket once it is listed. However, the coin was never listed and investors lost money. Instead, the exchange paid early investors with money collected from those who invested later.

South Korean Exchange CEO Sentenced to 16 Years in Prison
One of Coinup’s investment seminars.

Investigations into the Ponzi scheme revealed that, in order to mislead investors, Kang displayed a fake magazine at the exchange’s office with a photo of him standing next to South Korean President Moon Jae-in. The judge explained:

They created a plausible appearance, including a magazine with a photograph of the current president. In light of the consequences, the crime is serious.

However, the judge added that “the victims are also responsible for spreading the damage by investing excessively in the thought of obtaining high profits in a short time.”

South Korean Exchange CEO Sentenced to 16 Years in Prison
Coinup’s fake magazine featuring the CEO with South Korean President Moon Jae-in.

The South Korean crypto regulation is undergoing changes. The country’s top financial regulator, the Financial Services Agency, has said that it will tighten oversight of the industry in compliance with the standards set by the Financial Action Task Force (FATF). In June, Yonhap News reported that the number of crypto exchanges in South Korea had been rising, noting that the number of local crypto exchanges stood at 205. The government introduced the real-name system in January last year, effectively banning the use of anonymous bank accounts in crypto transactions in an effort to prevent money laundering and other illegal activities. However, banks have only been providing the real-name account service to the country’s top four crypto exchanges so far.

Democratic Party Representative Je Youn-kyung has proposed a bill to tighten online security rules for all cryptocurrency exchanges, but that bill is still pending in the National Assembly along with a number of other crypto-related bills. Meanwhile, a South Korean presidential committee is pushing for the government to establish the legal status for cryptocurrency for the country to stay competitive globally.

What do you think of Coinup’s scheme and the prison sentences the executives and their accomplices received? Let us know in the comments section below.

Images courtesy of Shutterstock, Hankyoreh, and IMBC.

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Kevin Helms

A student of Austrian Economics, Kevin found Bitcoin in 2011 and has been an evangelist ever since. His interests lie in Bitcoin security, open-source systems, network effects and the intersection between economics and cryptography.

Kevin Helms , 2019-11-13 12:20:16 ,

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While Bitcoin’s price seemingly moves without rhyme or reason — collapsing by dozens of percent and embarking on face-melting rallies on a whim — the cryptocurrency market is filled to the brim with fractals.

Related Reading: Analyst: Bitcoin Price Likely to Fall to Low-$8,000s as Chart Remains Weak

A brief aside: A fractal, in the context of technical analysis and financial markets anyway, is when an asset’s price action is seen during a different time. This form of analysis isn’t that popular, but it has proven to be somewhat valuable in analyzing Bitcoin.

One recent fractal popularized by a well-known cryptocurrency trader is implying that BTC is going to return to the low-$7,000s in the coming days.

Bitcoin Fractal Implies Retracement to Low-$7,000s

A well-known crypto trader going by “Tyler Durden” on Twitter recently posted the chart below, which shows that a Bitcoin price fractal may be playing out. The fractal has four phases: horizontal consolidation marked by one fakeout, a surge above the consolidation phase, a distribution, then a strong drop to fresh lows.

If the fractal plays out in full, BTC could reach the low-$7,000s again, potentially as low as $7,100. This would represent a 20-odd percent collapse from the current price point of $8,800.

It isn’t only a fractal that is hinting Bitcoin has the potential to visit its lows. As we reported on Saturday, Bloomberg believes that if the GTI Vera Convergence Divergence Indicator flips red, a downtrend could push the cryptocurrency back to $7,300.

Related Reading: Stephen Colbert Pokes Fun at Bitcoin in Monologue: Mainstream Gone Wrong?

Can Bulls Step In?

But again, many believe it is irrational to have such bearish interpretations of the cryptocurrency’s chart at the moment. As reported by NewsBTC earlier, Popular crypto trader Mayne recently noted that the “people waiting for $6,000” are irrational. He quipped that Bitcoin retracing and consolidating after its fourth-biggest bull move in history ($7,300 to $10,500, a 42% gain) is perfectly par for the course, but noted that it’s totally possible we can go lower from $8,800.

The medium-term technicals support this.

Trader and CoinTelegraph contributor FilbFilb found that by the end of November or start of December, the 50-week and 100-week moving averages will see a “golden cross,” which he claims is far more significant” for the Bitcoin market that other technical crosses.

Also, a Bitcoin price model created using Facebook Prophet machine learning found that the leading cryptocurrency is likely to end the year at just over $12,000. What’s notable about this model is that it called the price drop to $8,000 months in advance, and forecasted a ~$7,500 price bottom for BTC.

To put a cherry on the cryptocurrency cake, Crypto Thies observed that when Bitcoin bottomed at $7,300, it bounced decisively off the 0.618 Fibonacci Retracement of the move from $3,000 to $14,000, which correlates with the two-week volume-weighted moving average. He added that summer 2019’s consolidation was marked by Bitcoin flipping major resistances into support levels, implying that a bullish reversal and subsequent continuation is likely possible in the coming weeks.

Featured Image from Shutterstock

Nick Chong , 2019-11-10 12:00:38

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