Embezzled ₩7.1 billion in coins… Why did the prosecution give up on appealing?

"No practical benefit to an appeal"…Prosecutors accept bail in the 'Virtual Asset Protection Act Case No. 1'

A group who manipulated coin prices to illicitly gain around ₩7.1 billion was released on bail by court decision. As the prosecution decided not to appeal, the first defendants indicted and detained under the Virtual Asset User Protection Act, which went into effect last July, will now stand trial out of custody.

According to legal sources on the 30th, the Seoul Southern District Court, Criminal Division 14 (Presiding Judge Lee Jung-hee) granted the bail requests on the 19th for Mr. Lee (34) and Mr. Kang (29), who were indicted on charges of violating the Virtual Asset User Protection Act. They are accused of repeatedly placing market orders and fake buy orders on E Exchange to artificially inflate prices in order to sell D Coin—received from an overseas coin-issuing foundation—at a high price on a domestic exchange. Prosecutors estimate their illicit gains to be about ₩7.1 billion.

"No benefit to contesting bail"…Prosecutors give up on appeal

However, the Joint Investigation Team on Virtual Asset Crimes at the Seoul Southern District Prosecutors' Office (chief prosecutor Park Geon-uk), which investigated this case, decided not to appeal the bail decision. An official at the Southern District Prosecutors' Office stated, "While it is regrettable considering the intent of the Virtual Asset User Protection Act and the seriousness of the case, we decided not to appeal because the appeal process would not be practically effective." Since a decision to grant bail in a criminal case is not subject to immediate appeal, filing an appeal would not suspend the execution of the bail, meaning there is little practical impact.

Still, some argue that the prosecution should have responded more proactively, as this was the first major criminal case since the new regulations on virtual assets took effect. The act of appealing a court's bail decision, regardless of its practical benefits, often serves as a way to demonstrate investigative intent or the strength of a response to a case.

In fact, in the 'SM Entertainment price manipulation' case, prosecutors previously filed for bail cancellation for Kim Beom-su, the Chairman of the Management Innovation Committee at Kakao, who was indicted and detained for violating the Capital Markets Act, after he was released on bail after 101 days in detention, citing concerns of witness tampering and evidence destruction. The Seoul High Court at the time dismissed the prosecution's appeal, but some in the legal community viewed the move as a signal of the prosecution's determination to prove the charges.

There are also concerns, especially among the virtual asset community, that this bail decision could negatively impact investigations. This is because multiple unlisted coins, in addition to D Coin, were stored on the computer Mr. Lee used, and there may be further signs of price manipulation. However, it is not confirmed whether any evidence has actually been destroyed following his release.

Reporter Jeong Hee-won tophee@hankyung.com