Catenaa, Tuesday, December 2024 – The South Korean High Court last week upheld the three-year prison sentence for the son of Hancom CEO Kim Sang-cheol, convicted of creating a $6.7 million altcoin slush fund in collaboration with Arowana Tech, a Hancom-backed IT startup.
The Suwon District Court initially sentenced Kim’s son, whose first name is withheld, in August for breach of trust under the Specific Economic Crime Aggravated Punishment Act.
A 48-year-old Arowana Tech executive, surnamed Jeong, was also sentenced to two and a half years. Appeals by both defendants and prosecutors seeking harsher penalties were dismissed on December 11.
The court ruled that Kim and Jeong manipulated the value of Arowana (ARW) tokens between 2021 and 2022, allegedly using the proceeds for personal expenses, including NFTs, stocks, credit card payments, and luxury goods.
ARW’s sudden price surge in April 2021, climbing from $0.035 to $38 in 30 minutes, triggered suspicions. The token has since been delisted.
Prosecutors had sought nine years for Kim and six for Jeong, along with additional fines, but the High Court deemed the original sentences reasonable.
Investigators allege Hancom With, the blockchain arm of Hancom, also conspired in the scheme, although the company denies involvement.
Hancom, known for its Hangeul word processor and office software, is now led by Kim Yeon-soo, the elder daughter of the CEO, who is reportedly pursuing management reforms amid the scandal.
Prosecutors are still exploring the possibility of bringing charges against the senior Kim.
This case highlights the increasing scrutiny of corporate misconduct in South Korea, where regulatory authorities are clamping down on cryptocurrency irregularities.
