Prosecutors Seek 9-Year Prison Term for Hancom Chairman Over 9 Billion Won Slush Fund

Slush Funds Created Through Affiliate-Owned Cryptocurrency
Charged with Breach of Trust Under the Act on the Aggravated Punishment of Specific Economic Crimes

Prosecutors have requested a sentence of nine years in prison for Hancom Group Chairman Kim Sangcheol (73), who has been indicted on charges of creating slush funds worth around 9 billion won through group-owned cryptocurrency called "Arowana Token."

Hangeul and Computer logo. Yonhap News Agency

The Criminal Division 1 of Seongnam Branch, Suwon District Court (Chief Judge Kim Kyunghoon) held the final trial on September 10 for Chairman Kim, who was charged with breach of trust under the Act on the Aggravated Punishment of Specific Economic Crimes. The prosecution stated, "There is ample evidence supporting the charges, and the related criminal acts committed by accomplices now serving final sentences were also conducted under the defendant's instructions." They continued, "Many of the victims are ordinary people, making restitution impossible, so the potential for social condemnation is significant," and thereby requested the court sentence Kim to nine years in prison.

Chairman Kim was indicted in April last year on charges of private misappropriation, after allegedly transferring about 9.6 billion won worth of Bitcoin and other assets—gained by selling Arowana Tokens held by ArowanaTech, a cryptocurrency management company invested in by a Hancom affiliate—from December 2021 to October 2022, to an account under his second son's name. He is also accused of arbitrarily misappropriating about 490 million won of affiliate funds between April 2019 and May 2022 by acquiring stocks under borrowed names and making false salary payments to associates.

In his final defense, Chairman Kim's attorney argued, "Selling Arowana Tokens to raise business funds and using a portion for personal purposes were decisions made by employees, who have already served sentences for such acts. The defendant neither partook in the crime nor gained personal benefit," thereby denying the breach of trust allegation. However, regarding the business embezzlement charge, the defense acknowledged the factual details but appealed to the court to consider that the damages had been compensated.

In his final statement, Chairman Kim said, "I deeply regret that my lack of meticulousness and diligence caused harm to so many victims. If leniency is granted, I will strive to further develop the company and contribute more to society."

The court's verdict for Chairman Kim in this first-instance trial is scheduled to be delivered on November 5.

This content was produced with the assistance of AI translation services.