Thae Yong-ho’s son gets 3.5 years in prison for $960K crypto scam built on his father’s name

A Seoul court has sentenced the eldest son of former lawmaker and North Korean defector Thae Yong-ho to three years and six months in prison for taking about 1.4 billion won ($960,000) in cash and Bitcoin from acquaintances for crypto investments he never made.

The court found he used his father’s name to win victims’ trust. It is the first-instance ruling.

South Korean court sentences Tae over crypto investment fraud

The Seoul Central District Court’s Criminal Agreement Division 25, presided over by Judge Heo Jeong-ryong, handed down the three-year-and-six-month prison sentence after finding Tae guilty of fraud-related offences under South Korea’s Act on the Aggravated Punishment, etc. of Specific Economic Crimes.

According to the court’s findings, Tae repeatedly misrepresented the potential profitability of virtual asset investments to persuade acquaintances to hand over their money and Bitcoin.

Rather than executing the investments as promised, he obtained funds through deception, leaving victims with financial losses estimated at 1.4 billion won.

The court determined that the defendant had deliberately created the impression that he could generate substantial returns through cryptocurrency trading and investment activities.

The sentence represents the outcome of the first trial. The report did not indicate whether Tae intended to appeal the ruling.

The case also illustrates how crypto investment fraud can extend beyond anonymous online schemes. In this instance, the defendant allegedly relied on existing personal relationships and the credibility associated with his family name to persuade victims to participate.

Father’s political identity allegedly used to attract investors

One of the significant aspects of the crypto investment fraud case was the alleged use of Tae Yong-ho’s public profile to establish credibility with potential victims.

The defendant reportedly invoked his father’s name during the scheme, using the former lawmaker’s reputation to strengthen the confidence of acquaintances who were approached for money.

Tae Yong-ho previously served as a lawmaker representing the People Power Party and later became secretary-general of the National Unification Advisory Council.

His political background became part of the public discussion surrounding the allegations in October 2024, when questions about his eldest son’s alleged fraud and embezzlement were raised during a National Assembly audit.

The younger Tae was also accused of obtaining approximately 170 million won through a separate loan-related deception.

According to the indictment, he told a victim that his mother’s publishing company required financial assistance. He allegedly promised that a loan of 100 million won would be repaid with interest.

The allegations formed part of the broader criminal proceedings against him, which included the cryptocurrency investment scheme and other fraudulent financial transactions.

The court’s findings indicated that the defendant did not actually proceed with the investments he had used to solicit money.

The alleged use of a family member’s public standing adds another dimension to the case, showing how trust in influential individuals can be exploited in private financial arrangements.

Court considers confession and victim repayments in sentencing

Although the court imposed a prison sentence, it also considered several mitigating circumstances when determining the punishment.

According to the ruling, Tae admitted to his crimes from the investigation stage and was a first-time offender. The court also considered that he had repaid principal amounts and interest to some of the victims.

These factors were taken into account alongside the seriousness of the offences and the financial losses suffered by those who entrusted him with their money.

The three-year-and-six-month sentence reflects the court’s assessment of the fraudulent conduct while recognising the circumstances presented in mitigation.

The court’s findings also underline that cryptocurrency-related financial misconduct can attract serious criminal consequences under existing economic crime legislation, even when the transactions involve private acquaintances rather than large financial institutions.

Tae Yong-ho apologises following public controversy

The allegations also drew public attention because of the political profile of Tae Yong-ho, whose name was repeatedly mentioned during discussions surrounding his son’s case.

In October 2024, the former lawmaker addressed the controversy during a National Assembly session, expressing regret over the situation involving his eldest son.

“I am deeply sorry for causing public controversy due to my eldest son’s problem,” Tae Yong-ho said.

His apology came after lawmakers questioned him about the allegations of fraud and embezzlement involving his son during an audit of the National Assembly’s Foreign Affairs and Unification Committee.

Beyond the family and political implications, the conviction adds to concerns about fraudulent fundraising practices within the cryptocurrency sector. The case demonstrates how promises of investment returns, combined with personal connections and borrowed credibility, can expose unsuspecting individuals to significant financial losses.