Catenaa, Sunday, February 08, 2026-A South Korean court sentenced the CEO of a local crypto asset management firm to three years in prison for manipulating token prices to earn roughly 7.1 billion won ($4.88 million).
The Seoul Southern District Court found Jong-hwan Lee guilty of violating the Virtual Asset User Protection Act, the first enforcement of the law since it took effect in July 2024. Lee was also fined 500 million won ($343,939) and ordered to forfeit approximately 846 million won ($581,963) in illicit proceeds. The court did not take Lee into custody during the trial, citing good behavior.
Between July 22 and October 25, 2024, Lee allegedly used an automated trading program to inflate trading volumes and repeatedly execute wash trades on the ACE cryptocurrency. Investigators reported that trading surged from an average of 160,000 units to 2.45 million units in one day, with Lee responsible for 89% of the activity.
The court described the actions as obstructing fair price formation and undermining investor trust, stating that strict sentencing was necessary due to the lack of remorse. A former employee, Min-cheol Kang, received a two-year prison term with three years of probation.
The ruling partially acquitted the defendants on some of the 7.1 billion won figure, citing insufficient evidence. Lawmakers in South Korea are developing follow-up legislation, the Digital Asset Basic Act, which is expected to establish rules for stablecoins, initial coin offerings, and other aspects of the crypto market.
