South Korean prosecutors are seeking maximum prison sentences for executives allegedly involved in a $651 million crypto scam that left thousands of investors out of pocket. The scam involved the promise of payouts to individuals who paid their utilities bills using cryptoassets through the OnNetworks platform. However, the firm reneged on these promises, causing financial loss to approximately 8,000 people. The trial is taking place at the Seoul Southern District Court, and the prosecution is pushing for significant prison terms for the CEO of OnNetworks, another executive, and the CEO of an affiliated company.
The OnNetworks crypto scam spanned from 2021 to February last year, during which the accused actively recruited members for their platform. The alleged victims were lured by the promise of cashback-like returns ranging from 4% to 9% on their payments made through the OnNetworks platform. As a result, around 10 victims attended a recent court hearing to demand justice and punishment for the individuals behind the scam.
South Korean prosecutors are not taking the crypto scam lightly and are seeking severe penalties for those involved. The prosecution has called for a 15-year prison sentence for the CEO of OnNetworks, surname Park, highlighting the role of the executive in orchestrating the scam. Additionally, they are pursuing a five-year prison term for an executive from the same company, surname Kim. Furthermore, the CEO of an OnNetworks affiliated company, surname Yeom, is facing a potential 12-year prison sentence. These proposed sentences reflect the gravity of the charges and the massive financial loss suffered by investors.
During the trial, the CEO of OnNetworks, Park, expressed remorse and asked for forgiveness from the victims. However, he requested a two-month delay and claimed confidence in his ability to restore the damages suffered by the victims promptly. On the other hand, Yeom, the CEO of the affiliated company, denied direct involvement in the scam. While acknowledging his moral responsibility as a company executive, Yeom argued that the scam activities were beyond his prescribed scope of responsibility.
The establishment of a special crypto crime investigation unit by the Seoul Southern District Prosecutors’ Office demonstrates the seriousness with which South Korea is tackling digital fraud. This 30-investigator-strong unit includes officers from various regulatory bodies, such as the Financial Supervisory Service, the National Tax Service, and the customs bureau. By collaborating across these agencies, South Korea aims to strengthen its ability to prevent and prosecute crypto scams, protecting the interests of its citizens and maintaining the integrity of the financial system.
The OnNetworks crypto scam has highlighted the susceptibility of individuals to fraudulent schemes involving cryptoassets. With thousands of investors left out of pocket, South Korean prosecutors are seeking harsh prison sentences for the executives allegedly responsible for orchestrating the scam. The trial’s outcome will not only affect the accused but also send a strong message to potential scammers in the crypto industry. By actively combating such crimes and establishing dedicated investigative units, South Korea aims to protect its citizens and maintain trust in the growing crypto market.
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