A South Korean court sentenced Jong-hwan Lee, CEO of a local crypto exchange, to three years in prison for market manipulation. The ruling marks the first application of the Virtual Asset User Protection Act, which took effect in July 2024.
The Seoul Southern District Court found that Lee used an automated trading program to inflate volumes and carry out wash trading on the ACE cryptocurrency between July 22 and October 25, 2024. According to court records, the scheme generated estimated illicit profits of 7.1 billion won, equivalent to $4.88 million.
In addition to the prison sentence, the court imposed a fine of 500 million won, about $343,939, and ordered the forfeiture of approximately 846 million won, around $581,963. The court decided not to take Lee into custody in the courtroom, citing his conduct during the trial.
Records showed that ACE’s average daily trading volume jumped from 160,000 units to 2.45 million units in a single day, with Lee accounting for 89% of the activity. A former employee, Min-cheol Kang, received a two-year prison sentence with three years of probation.
Source: https://www.hankyung.com/article/2026020443831
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