By Michael Scott
The district court in Suwon, South Korea, passed judgment on the six V Global executives involved in a $1.5 billion fraud scandal. The court ruled that the executives would be put behind bars for seven years while three executives would embattle court charges.
Court Action on V Global Executives
The South Korean digital currency exchange V Global lured 50000 investors into a Ponzi scheme promising them unrealistic returns of over 300%. Initially, users who created an account with V Global deposited $5,300 and were assured that their investment would yield $16,000 over time.
V Global compensated its user $1,006 for referring new customers to the platform. At the beginning of the project, the V Global deal seemed viable since the firm honored the promise to the early investors. Later, the V Global initiative became a pyramid scheme after failing to compensate the late investors for their return on investment.
Following the V Global case, the court placed Mr.Yang and Mr. Oh behind bars for eight years, of which three years were linked to their contribution to defrauding the investors. On the contrary, a report covered in South Korean media- Economist.co.kr on December 26 disclosed that the other four executives were subjected to a three-year jail sentence and five-year court proceedings.
The Court of Suwon proved the innocence of three executives who were not detained since they were legally allowed to defend themselves until proven guilty.
Did the Prosecution Team Make the Fair Decision?
The V Global management team was accused of compromising with the investigation by attempting to destroy the evidence against the Criminal Act. The judge of the 12 Criminal section of Suwon District Court was lenient to the six executives. He observed that the amount of fraud and number of investors affected failed to tally with last year’s estimated amount.
A February report submitted by Kyeongin’s disclosed that 10000 investors had received their return on investment and additional incentives from customer referral bonuses. However, by observing the investment laws, most V Global users reinvested their profits in the platform.
Beyond this, in June 2021, investors lamented that V Global replicated the Ponzi scheme after paying its users’ referral bonuses amounting to $1000 from new users’ money.
In the meantime, the six V Global executives join their CEO Mr. Lee who was sentenced to 22 years jail term in February.