Prosecution appeals in first Virtual Asset Act case after court declines to calculate 7.1 billion won in illicit gains

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[Financial News] The prosecution service has appealed the first-instance ruling against a coin management firm whose executives were indicted on charges of manipulating virtual asset (coin) prices to obtain illicit gains.
The Joint Investigation Division for Virtual Asset Crimes at the Seoul Southern District Prosecutors’ Office, headed by Chief Prosecutor Kim Yong-je, announced on the 10th that it had filed an appeal with the 14th Criminal Division of the Seoul Southern District Court, presided over by Judge Lee Jeong-hee, which heard the case against the firm’s chief executive, a 35-year-old identified only by the surname Lee, and a 30-year-old accomplice surnamed Kang, for violating the Virtual Asset Act.
The prosecution service stated, "We appealed the first-instance court’s decision that it was impossible to accurately calculate the amount of illicit gains obtained by the defendants and therefore could not order forfeiture," citing misinterpretation of the law, misjudgment of facts, and unfair sentencing as grounds for appeal.
At the sentencing hearing held in November last year, the prosecution service requested a 10-year prison term for Lee, along with a fine of about 23 billion won and forfeiture of roughly 8 billion won, and a 6-year prison term for Kang. However, on the 4th of this month, the court sentenced Lee to three years in prison, a fine of 500 million won, and forfeiture of about 846 million won, while sentencing Kang to two years in prison, suspended for three years.
The court acknowledged the charge of price manipulation using an automated trading program, but found that the evidence presented by the prosecution service was insufficient to accurately calculate the alleged 7.1 billion won in illicit gains.
This case is the first prosecution brought after sanctions on unfair coin trading began under the Act on the Protection of Virtual Asset Users, which took effect in July 2024. The prosecution service indicted the case after receiving it from the Financial Supervisory Service (FSS) through a fast-track procedure for expedited investigation.
A prosecution official noted, "It is highly significant that the court recognized guilt in the first indictment brought under the Virtual Asset Act," adding, "In line with the government’s principle that 'those who manipulate prices will have even their principal confiscated,' we sought thorough forfeiture not only of criminal proceeds but also of the principal. In the appeal trial, we plan to make every effort to sustain the charges by supplementing our proof and explanations so that forfeiture of approximately 7.1 billion won in illicit gains can be ordered in line with our sentencing request."
psh@fnnews.com Park Seong-hyun Reporter