Founder of a $ 2 billion cryptocurrency pyramid scheme gets 25 years in prison

Lee Bong-gul, CEO of the bankrupt South Korean cryptocurrency exchange V Global, has been sentenced to 25 years in prison. According to local media reports, the country’s Supreme Court upheld the verdict of the Appeals Division — Ben Gul will go to jail for the Ponzi scheme that misled thousands of investors. According to the Yonhap news agency, three other V Global executives were taken into custody and sentenced to 4 to 14 years in prison.

Interestingly, the Court of Appeal had previously ruled that the criminal proceeds of the crypto pyramid would not be confiscated. The judge noted that it was difficult for the investigation to determine the exact amount of money stolen by V Global. The Supreme Court also did not specify whether the money would be returned to the defrauded investors.

Between July 2020 and April 2021, the cryptocurrency exchange V Global defrauded about 50,000 investors of KRW 2.8 trillion (approximately USD 2.26 billion). The company promised investors a 300% return on investment in the native V Cash token. The exchange required customers to create accounts with a deposit of 6 million won (4,860 USD) and guaranteed a return of 18 million won. When the crypto exchange was shut down in September 2021, the V Cash token immediately depreciated, and investors lost all their savings.

The crypto exchange also promised users 1.2 million won in commissions if they successfully suggested another investor instead. Some of the money was returned to users, but no one was informed that the commission was taken from the deposits of new customers. So it turned out to be another fraud.

According to The Economist, in December 2022, seven more V Global executives were found guilty of creating the Ponzi scheme and sentenced to prison. All of them are currently appealing the verdict.

While there is at least some certainty in the V Global case, South Korean prosecutors are still unable to detain Terraform Labs founder До Квон" href="https://noworries.media/biography/do-kvon/" data-bio-id="3665">Do Kwon. Last May, the Terra-Luna crypto project collapsed. Investors in the ecosystem lost billions of dollars, and the cryptocurrency industry witnessed a «chain reaction» of top crypto firms going bankrupt. At the moment, it is known that Do Kwon is living in Serbia and his extradition is still in question.