Key Takeaways
- • Prosecutors have requested a 9-year prison sentence for Hancom Group Chairman Kim Sangcheol (73) for creating approximately 9 billion won ($6.71 million USD equivalent) in slush funds through Arowana Token, a cryptocurrency managed by affiliate ArowanaTech.
- • Chairman Kim stands accused of transferring 9.6 billion won worth of Bitcoin and other cryptocurrency assets to an account under his second son's name between December 2021 and October 2022, constituting private misappropriation under South Korea's Act on the Aggravated Punishment of Specific Economic Crimes.
- • The prosecution emphasized that accomplices have already received final sentences for crimes conducted under Chairman Kim's instructions, and that "many victims are ordinary people," making restitution impossible and warranting significant social condemnation.
- • Chairman Kim's second son was separately sentenced to three years in prison in August 2026 by Suwon District Court on related breach of trust charges; the son's appeal was denied.
- • The final trial before Suwon District Court's Criminal Division 1 occurred on September 10, 2026, with the court expected to render its judgment on the prosecution's sentencing recommendation.
Summary
South Korean prosecutors have sought a 9-year prison sentence for Hancom Group Chairman Kim Sangcheol in connection with an alleged cryptocurrency-based slush fund scheme. The case centers on the creation and misappropriation of approximately 9 billion won through Arowana Token, a digital asset managed by ArowanaTech, a company invested in by Hancom affiliates. The final trial hearing took place on September 10, 2026, before Suwon District Court's Criminal Division 1.
According to prosecutors, Chairman Kim allegedly transferred 9.6 billion won worth of Bitcoin and other cryptocurrency assets—proceeds from the sale of Arowana Tokens held by ArowanaTech—to an account registered under his second son's name between December 2021 and October 2022. Beyond the cryptocurrency scheme, prosecutors also charged Kim with misappropriating approximately 490 million won in affiliate funds between April 2019 and May 2022 through the acquisition of stocks using borrowed names and the issuance of false salary payments to associates. The indictment was formally filed in April 2025.
The prosecution's closing argument emphasized several aggravating factors in requesting the maximum sentencing recommendation. Prosecutors stated they possessed "ample evidence" supporting all charges and noted that accomplices already serving final sentences had acted under Chairman Kim's direct instructions. A critical element of the prosecution's case was the impact on victims: prosecutors highlighted that "many of the victims are ordinary people," making full restitution impossible and thereby heightening the potential for social condemnation and public harm. This argument underscores the prosecution's view that the scheme extended beyond corporate misconduct into the broader retail investor base.
The case has already resulted in collateral convictions within the Kim family. Suwon District Court sentenced Chairman Kim's second son to three years in prison in August 2026 on breach of trust charges related to the same scheme. The son's subsequent appeal was denied, with the court upholding the conviction. This parallel conviction strengthens the prosecution's narrative that the slush fund operation was a coordinated family enterprise rather than an isolated corporate transgression.
According to prosecutors, Chairman Kim allegedly transferred 9.6 billion won worth of Bitcoin and other cryptocurrency assets—proceeds from the sale of Arowana Tokens held by ArowanaTech—to an account registered under his second son's name between December 2021 and October 2022. Beyond the cryptocurrency scheme, prosecutors also charged Kim with misappropriating approximately 490 million won in affiliate funds between April 2019 and May 2022 through the acquisition of stocks using borrowed names and the issuance of false salary payments to associates. The indictment was formally filed in April 2025.
The prosecution's closing argument emphasized several aggravating factors in requesting the maximum sentencing recommendation. Prosecutors stated they possessed "ample evidence" supporting all charges and noted that accomplices already serving final sentences had acted under Chairman Kim's direct instructions. A critical element of the prosecution's case was the impact on victims: prosecutors highlighted that "many of the victims are ordinary people," making full restitution impossible and thereby heightening the potential for social condemnation and public harm. This argument underscores the prosecution's view that the scheme extended beyond corporate misconduct into the broader retail investor base.
The case has already resulted in collateral convictions within the Kim family. Suwon District Court sentenced Chairman Kim's second son to three years in prison in August 2026 on breach of trust charges related to the same scheme. The son's subsequent appeal was denied, with the court upholding the conviction. This parallel conviction strengthens the prosecution's narrative that the slush fund operation was a coordinated family enterprise rather than an isolated corporate transgression.
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