Appeal in First Crypto Market-Manipulation Case Under User Protection Law to Open June 11, With $5.1 Million in Alleged Gains at Issue
Summary
- The appeals trial in the first market manipulation case since the Virtual Asset User Protection Act took effect will begin on June 11.
- The lower court found the trades exceeded the scope of normal liquidity provision and upheld the market manipulation charges, handing down prison terms, a fine and forfeiture.
- The appeal will center on the basis for calculating the alleged $5.1 million in illicit gains and whether those illicit gains can be proven.
Forecast Trend Report by Period
The appeals trial in the first market-manipulation case brought under South Korea’s Virtual Asset User Protection Act will begin next month, with prosecutors’ alleged $5.1 million in illicit gains set to be a central issue.
NewsDream reported on May 18 that the Seoul High Court’s Criminal Division 16-3 set the first hearing for June 11. The hearing comes about four months after the first-instance ruling in February.
The case was the first indictment under the law pursued through the Financial Services Commission’s fast-track procedure. Prosecutors alleged that A, the head of a virtual-asset management firm, and an accomplice identified as B manipulated the price of a specific coin by repeatedly placing high-priced buy orders, low-priced sell orders and spoofed orders.
The lower court found the defendants’ trading exceeded the bounds of ordinary liquidity provision and convicted them of market manipulation. It sentenced A to three years in prison, a fine of 500 million won ($360,000) and forfeiture of about 840 million won ($604,000). B received a two-year prison term, suspended for three years.
The court, however, rejected prosecutors’ request to forfeit about $5.1 million in alleged illicit gains. It found that the basis for calculating the amount had not been sufficiently explained.
Both prosecutors and the defendants appealed. The second trial will focus on whether the alleged illicit gains can be substantiated and whether the market-manipulation ruling should stand.
