Cryptocurrency entrepreneur sentenced to three years for token manipulation., 2026/02/04 13:35:12

The Southern District Court of Seoul has sentenced Jong-hwan Lee, the CEO of an unnamed South Korean cryptocurrency asset management firm, to three years in prison for market manipulation involving tokens and violations of the virtual asset user protection law.

In addition to the prison term, the court imposed a fine of 500 million won (approximately $343,939) and ordered the confiscation of around 846 million won ($581,963) deemed to have been obtained through illegal means. A former employee of the firm, Min-cheol Kang, who faced similar charges, received a two-year prison sentence along with three years of probation.

According to investigators, from July 22 to October 25, 2024, Lee utilized an automated trading program to inflate trading volumes and repeatedly placed orders for fictitious transactions to manipulate the price of ACE tokens. The day before Lee began using this program, the average daily trading volume of the cryptocurrency was about 160,000 tokens. The following day, the volume surged to 2.45 million tokens, with Lee accounting for 89% of the trading activity.

It is estimated that Lee profited approximately 7.1 billion Korean won (around $4.88 million) through these actions. The court regarded this as a serious offense that undermines fair pricing in the digital asset market and erodes investor trust.

Currently, South Korean lawmakers are working on regulations governing the issuance and trading of tokenized securities using blockchain technology. These laws are expected to come into effect in January 2027.