- The Pyramid scheme ran from July 2020 to April 2021.
- Investors were duped of $2.26 billion
- Other accused get 4 to 14 years; and are appealing.
Pyramid schemes are infamous for their deceptively innocent descriptions. The crypto industry is also dealing with its fair share of pyramid scheme. One such scheme popped up in South Korea, created by led by V Global. The scheme was run for almost a year (2020-21). The Chief Executive Officer (CEO) of the failed crypto exchange was punished with 25 years of imprisonment.
Lee Byung-gul, V Global’s CEO, got 25 years in prison now that the Supreme Court of Korea upheld his conviction on Friday. Along with Lee, three of the accused in the case, who shall remain unnamed, got four to fourteen years imprisonment, as ordered by the court on the same day, as reported by the local media.
Citing personal information protection, the convicts’ full names were removed from the sentencing documents, which were provided to an authorized media outlet, as given by a spokeswoman at the Supreme Court. The media got Lee’s full name after he was previously named in the lower court’s conviction list.
The Spokeswomen from the Supreme Court denied commenting anything on the matter, that the lower court had previously ruled that the criminal proceeding in the said pyramid scheme would not be confiscated, as to fathom the exact amount of money racked up by V Global. The Supreme court just upheld the same decision.
Nearly 50,000 investors were duped of almost 2.8 trillion Korean won between July 2020 and April 2021; the amount, when accounted with the inflation rate as of today, equals $2.26 billion; this was per the court’s ruling reported by the local media.
V Global issued a token called V Cash and promised a 300% return on investments. The new members were required to create an account with a minimum deposit of 6 million Korean won, which equals $4,860. Then they were offered a guaranteed return of 18 million Korean won, that is $14,580. But V Cash became worthless when the exchange shut down in September 2021.
If an investor refers them to another, they were reportedly promised 1.2 million won in commission. Initially, some users did receive this money, but it was allegedly taken from other new users. Hence it is clear that the money was going in cycles reaching nowhere.
Seven other executives of V Global were found guilty of conspiracy in the pyramid scheme. They were imprisoned for eight years by the district court, as published by media in December 2022, and they are appealing the conviction.
South Korean prosecutors are trying to capture Kwon Do-Hyung, an S.Korean citizen and Terraform Labs Pte. Co-founder over the charges of Capital Market Law violations and fraud. The collapse of Terra Luna’s stable coin in May 2022 blew millions of dollars in thin air and created a domino effect affecting the whole industry. Do-Hyung has denied all the charges and is expected to be living currently in Serbia.
Source: https://www.thecoinrepublic.com/2023/01/16/in-v-globals-2-b-crypto-pyramid-scheme-ceo-gets-25-years/