Manipulating ACE coin price for illegal profits exceeding $4 million! Korean CEO jailed for three years, crypto regulation tightening across the board

A seismic ruling has shaken South Korea’s crypto industry. The Seoul Southern District Court sentenced Jong-hwan Lee, CEO of a domestic crypto asset management company, to three years in prison for manipulating token prices for profit, imposed a fine of 500 million KRW, and confiscated approximately 846 million KRW of illegal gains. The case involved illegal profits of about 7.1 billion KRW (approximately $48.8 million), marking the first conviction since the enforcement of the Virtual Asset User Protection Act in South Korea.

The court disclosed that between July 22, 2024, and October 25, 2024, Jong-hwan Lee used automated trading programs to create false trading volumes and repeatedly issued wash trade instructions to manipulate the ACE token price. Data showed that before his operations, the token’s average daily trading volume was only about 160,000 units, which skyrocketed to 2.45 million units the day after the program was activated. Investigations found that approximately 89% of these trades were related to him.

The judge pointed out that such behavior severely undermines market fairness and damages investor trust. Since the defendant showed no remorse during the trial, strict punishment was necessary. In addition to the main offender, former company employee Min-cheol Kang was sentenced to two years in prison, suspended for three years, for assisting in market manipulation. Although some evidence regarding the involved amounts was not fully accepted by the court, it still recognized a conspiracy between the parties.

This ruling is seen as a significant milestone in South Korea’s crypto regulation. Since the Virtual Asset User Protection Act took effect in July 2024, it was successfully applied for the first time. Meanwhile, South Korean lawmakers are advancing the Basic Law on Digital Assets, aiming to further regulate stablecoins, initial coin offerings, and other areas.

Industry insiders believe this case sends a strong signal: major Asian economies are accelerating the establishment of stricter crypto market order, and any attempt to manipulate prices or create false liquidity will face severe legal consequences.