Crypto CEO Jailed in Landmark Ruling for ACE Token Price Manipulation

TLDR

• South Korea issues first crypto prison sentence over ACE Token wash trading
• Court jails crypto CEO as ACE Token scheme triggers landmark ruling
• New Korean crypto law delivers first conviction in market rigging case
• ACE Token manipulation leads to historic jail sentence in Korea
• Crypto wash trading case sets new enforcement standard in South Korea

South Korea issued a landmark ruling as a court sentenced a crypto executive for manipulating ACE Token prices. The judgment marked the first prison sentence under the Virtual Asset User Protection Act. Moreover, the ruling signaled a stricter approach toward unfair trading in the digital asset sector.

Court Delivers First Sentence Under New Protection Law

The Seoul Southern District Court sentenced CEO Lee Jong-hwan to three years for manipulating ACE Token prices. The court imposed a fine and ordered the forfeiture of criminal proceeds, and it underscored the severity of the scheme. The court confirmed that automated wash trades inflated volumes and distorted normal trading patterns.

The court concluded that Lee distorted market activity through repeated high-frequency orders involving ACE Token. It determined that his trading removed genuine price discovery and misled market participants, and it noted his extensive use of artificial volume. The court stated that the conduct breached the core protections established under the new law.

Although prosecutors claimed larger illegal gains, the court rejected that figure due to insufficient evidence. The court reviewed transaction data and identified gaps in the prosecution’s calculations, and it reduced the penalty accordingly. The panel ruled that the manipulation of ACE Token met the law’s threshold for criminal punishment.

Automated Trading Program Drove ACE Token Price Distortion

Lee used an automated program to push ACE Token activity far beyond typical volume levels. The system created artificial trades that increased market pressure, and it produced a surge that investigators attributed almost entirely to his account.  The program produced dummy buy orders that created a misleading buy wall.

Daily trading volume jumped sharply after the program began operating on ACE Token. The sudden rise in activity disrupted normal behavior and altered price movements, and it made the asset appear more active than usual. The manipulation forced authorities to examine the structural weaknesses in thinly traded tokens.

The court ruled that these coordinated actions served no rational investment purpose. It found that the trades created an illusion of strong demand for ACE Token and it determined that the activity supported a long-running scheme. The sentence reflected the operational scale and repeated nature of the manipulation.

Ruling Signals Stronger Enforcement and Wider Industry Impact

Legal experts expect broader enforcement after the first ruling under the new protection law involving ACE Token. They argue that the judgment establishes a clear standard that prohibits artificial volume generation, and it may reshape compliance strategies across local platforms. The outcome highlights the increased penalties tied to unfair trading practices.

The ruling also revived discussions about previous cases that lacked this legal framework. Observers noted that earlier acquittals might have differed under the stricter rules, and they stressed that digital assets now face higher accountability. The decision showed how courts may respond to complex trading programs designed to distort markets.

South Korea continues preparing a second legislative package to regulate broader digital asset activities. Lawmakers plan to strengthen oversight of stablecoins and offerings, and they aim to prevent repeated schemes similar to the ACE Token case. Regulators anticipate further actions as more investigations reach the courts.

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