CoinUp, the reputed cryptocurrency exchange from South Korea, is yet again taking the internet by storm, but this time for all the wrong reasons. According to a news report, several officials (60 to be more precise) from the CoinUp cryptocurrency exchange were arrested for a fraudulent crypto-related scheme that amounted to over USD 386 million. Following this, the South Korean court in Seoul, convicted the head of CoinUp, Kang Seok-Jung alias “Cash King,” for 16 years of imprisonment and the vice president for 11 years along with eight other officials who were also given jail time on November 11.
The campaign was launched in 2018 and eventually, it was shut down by the police this February, after Kang and his executives were caught for creating fake images that featured overseas data centers and also a fake video. It also went to the extent to photoshopping and distributing a picture of Kang standing next to the South Korean President Moon Jae on the cover page of a reputed South Korean magazine.
CoinUp had told its investors in a South Korean convention center, which accommodated over 5000 attendees, that they would receive a return of 200% on their investments in 4 to 10 weeks if they invested in the packaged products of the exchange. CoinUp left no stone unturned in making the schemes appear legitimate, but ultimately got caught and the court deemed the fraud as “calculative, deceptive, precise and organized.” The statement given by the court read like this,
They used the social interest in cryptocurrency to collect money from many victims through unclear coins. We also used blockages and even published composite photos as if the current president and Kang were taken together. Mr. Kang is the representative who actually operated the CoinUp, and he was the top person who led the crime by setting up the allowance system and planning the coin products.
Kang and his accomplices used the investors’ funds to award themselves a substantial share of the fund while investing in some bad and worthless cryptos. According to the reports, the police could only cease assets worth USD 258 million against the total amassed amount of USD 386 million.